Citizens Information | Northside Citizens Information Service

NewsBudget 2012 was announced on 5 December and 6 December 2011.
 

This document will be updated shortly to outline the changes made to Social Protection payments.

Some of the  budget changes which may affect people living in Ireland are set out below, for further information please call or visit either of our offices to speak to an information provider.

Some of the changes announced in the Budget come into effect immediately. Others take effect from the beginning of January 2012. Many others have to be finalised before coming into effect. Some elements of these measures may change when the Finance Bill is published – this is expected in early 2012.

Income tax

There are no changes in the existing rates or income tax bands. There are also no changes to existing tax credits.
However, Illness Benefit will now be taxed from the first day of payment; previously the first 6 weeks (36 days) were exempt from tax.

 

Universal Social Charge (USC)

People with an income of less than €10,036 will no longer pay the Universal Social Charge. Currently, people with an income below €4,004 do not pay USC.
 

PRSI

The current relief of 50% of employer PRSI for employee contributions to pension schemes has been abolished. (1 January 2012)

PRSI will be expanded to cover rental, investment and other forms of income from 2013.
 

Value-Added Tax (VAT)
 

The standard rate of VAT will be increased from 21% to 23% from 1 January 2012. This only affects goods which are already liable to the 21% rate.
The rate of VAT will be reduced from 21% to 13.5% on district heating, for example, where heating is supplied from a central source to a number of business premises within a building. This brings this form of heating in line with other energy suppliers.
 

Property taxes
 

Household charge
A household charge of €100 is being introduced in 2012. This charge will fund local services, in line with the requirement in the EU/IMF Programme of Financial Support for Ireland. The charge is an interim measure pending design and implementation of a full property tax in 2014.

Homeowners (not tenants) will be liable for the household charge. The charge does not apply to social housing or housing provided by a charity. There will be a waiver for those on Mortgage Interest Supplement and for those residing in certain categories of unfinished housing estates. Provision will also be made to allow payment of the charge in instalments.
 

Mortgage interest relief (MIR)
 

Mortgage interest relief will no longer be available to house purchasers who purchase after the end of 2012 and will be fully abolished from 2018, as previously announced.

First time buyers in 2012 will get mortgage interest relief at 25% for the first two years, 22.5% for years 3 and 4 and 20% for years 6 and 7. For first time buyers the upper thresholds for tax relief are €20,000 for people who are married, in a civil partnership or widowed and €10,000 for people who are unmarried and not in a civil partnership.

Non-first time buyers in 2012 will get mortgage interest relief at 15%. The upper thresholds for non-first-time buyers for tax relief are €6,000 for people who are married, in a civil partnership or widowed and €3,000 for people who are unmarried and not in a civil partnership.

The rate of mortgage interest relief will be increased to 30% for first time buyers who took out their first mortgage between 2004 and 2008.
 

Stamp duty
 

The current stamp duty arrangements for residential property will continue to apply with 1% on transactions up to and including €1 million and 2% thereafter.

Multiple stamp duty rates for non-residential properties (including farmland, commercial and industrial buildings) will be abolished. The current top rate of 6% will be replaced with a flat rate of 2% in respect of instruments executed after midnight 6 December 2011.
 

Motor tax rates
 

Motor tax rates for all categories will increase. (1 January 2011)

Motor tax for cars in band A will go up from €104 to €160, and band B goes up from €156 to €225. Band C will go up from €302 to €330, Band D - €447 to €481, Band E - €630 to €677, Band F - €1,050 to €1,129, Band G - €2,100 to €2,258.

Motor tax rates based on engine size will also increase. For example, engines with 1,001 to 1,100cc will go from €259 to €278; 1,601 to 1,700cc engines will go from €471 to €506; 2,001 to 2,100cc engines will go from €784 to €843.

Motor tax on electric vehicles will increase from €146 to €157.