Budget 2025,
A Guide
Taxation & Workers
- The USC will be cut from 4% to 3% on incomes of €25,000 to €70,000, the second consecutive reduction to the USC rate
- The national minimum wage will increase by 80 cent to €13.50 per hour from 1 January 2025
- Entry threshold to 3% rate increased by €1,622 to €27,382
- The main tax credits – the Personal, Employee and Earned Income Credits – will increase by €125
- The Standard Rate Cut Off Point will increase by €2,000 to €44,000, with proportionate increases for married couples and civil partners
- Inheritance tax will increase for all thresholds – Group A up from €335,000 to €400,000, Group B up to €40,000 and Group C up to €20,000
- Exemption from Income Tax, Capital Gains Tax and Capital Acquisions Tax on payments made to women impacted by CervicalCheck failures
Education and Children
- Free schoolbooks initiative extended to transition and senior cycle pupils
- Funding to continue for the school transport fee reduction and State exam fee waiver
- Continued reduction of student contribution fee by €1,000
- Once-off reduction of 33% in contribution fee for apprentices in higher education
- Post-graduate tuition fee contribution increase of €1,000 for student grant recipients
- Double payments of child benefit in November and December
- Double payment of the foster care allowance
- €400 lump sum payment for working family payment recipients
- €100 lump sum payment per child to recipients of qualified child increase payments
- National childcare scheme funding to rise by 44%, resulting in reduction of fulltime childcare costs by €1,100
- New ‘baby boost’ one-off payment of €420 for each newborn child from 1 January
- Free public transport to be extended to children aged five to eight
Health
- 495 new beds to health services across hospital and community services
- Increased access to IVF and Hormone Replacement Therapy to be free of charge
- Increase in numbers working in health service
Public Sector Employment
- 1,600 additional Special Needs Assistants (SNAs) & 768 extra Special Education Teachers
- 1,000 additional Gardaí & 150 extra Gardaí civilian staff
- 350 additional Irish Prison Service personnel
- 400 additional International Protection Office personnel
- Net increase of 400 Defence Forces members in 2025
Housing and Renters
- The rent tax credit offered to tenants will rise from €750 to €1,000, and to €2,000 for a jointly assessed couple
- An additional €1.25bn will be made available to the Land Development Agency, bringing the total amount of funding for the LDA to €6.25bn
- Help to Buy scheme will be extended until the end of 2029
- Properties worth over €1.5m to pay 6% stamp duty
- Existing 1% stamp duty to apply to values up to €1m and 2% above €1m
- Relief for pre-letting expenses for landlords extended for three years until the end of 2027 to help vacant property owners bring accommodation into the rental system
- Vacant homes tax increased from five to seven times the property’s existing base Local Property Tax rate
Cost of living
- Energy credit of €250 for all households to be paid in two equal payments, one before the end of 2024 and one after
- Proposal for the 9% reduced VAT rate for gas and electricity to be extended for another six months to 30 April 2025
- Further €300 lump sum payment to fuel allowance recipients in November
- Additional €200 for recipients of the living alone allowance
VAT
Increase in VAT Registration thresholds for businesses from:
- €40,000 to €42,500 for service only businesses
- €80,000 to €85,000 for goods and services providers
Excise Duty
- Cigarettes duty increased by €1.00 per pack of 20, pro rata increases will be applied for all other tobacco products
- E-cigarettes: introduction of 50c tax per 50ml of e-liquid to commence mid-2025
Transport
- Extension of Young Adult and Student Card to cover adults aged 19-25 to the end of 2025
- Free public transport will be extended to include children aged 5-8 for the first time
Climate
- €7.50 increase on current rate of carbon tax on petrol and diesel from €56 to €63.50 per tonne of carbon dioxide emmitted from 9 October
- Including VAT, carbon tax increase represents a rise of around 2.1 cent per litre of petrol and 2.5 cent to a litre of diesel
- Increase on carbon tax levied on other fuels, including home heating, to be brought in from May 2025
- Amendment for battery electronic commercial vehicles so people can qualify for €200 vehicle registration tax rate
Social Welfare
- €12 weekly increase for Social Welfare Payments, including pensions
- A €300 lump sum payment for Fuel Allowance recipients will be paid in November
- Additional €200 will be paid for those in receipt of Living Alone Allowance
- €400 once-off payment for recipients of Carer’s Support Grant, Disability Allowance, Blind Welfare Allowance, Invalidity Pension and Domiciliary Care Allowance
- €400 once-off payment for recipients of Working Family Payment
- Carer’s Support Grant will increase by €150, to €2,000
Capital Expenditure
€3 billion from the sale of AIB shares will be allocated as follows:
- €1 billion to Irish Water for non-domestic capital investment
- €1.25 billion to the Land Development Agency for the development of social and affordable housing
- €750 million for the development of the Electricity Grid Network
Sources include: rte.ie
Please note: There may be further changes to the above information following the Finance Bill. Every effort has been made to ensure that the information provided here is accurate and up to date (as of 1st October 2024). The information provided is of a general nature and may not address the specific circumstances of a particular individual. Employee Financial Wellness does not accept any liability arising from any errors or omissions.