Budget 2015: Tax, USC, water-charges tax relief among the main changes

Budget 2015: Tax, USC, water-charges tax relief among the main changes

Some of the most significant changes outlined in today's Budget 2015 by Finance Minister Michael Noonan include:

:: Income Tax – As expected the top rate falls by 1% to 40% while the band for the payment of the standard rate moves from by €1,000 to €33,800 for single individuals;

:: Universal Social Charge – The deeply unpopular tax on earnings will be altered to take 80,000 low paid workers out of the net. A new 8% rate for incomes over €70,000 and an 11% rate for self-employed income over €100,000;

:: Tourism – The special 9% VAT rate for the hospitality industry will be retained, but with a warning that if businesses try to cash in by hiking prices there is no argument for keeping it;

:: Pensions – The 0.6% tax on lump sums saved for pensions will stop at the end of the year while a secondary 0.15% levy rate will run until the end of next year;

:: Farms – Stamp duty relief will apply for land transfers between close relatives;

:: First Time Buyers – The tax paid on the interest on savings, Dirt, will be refunded up to 2017 for people who use the money to finance deposits worth up to one fifth of the cost of their first home;

:: Water charges – An income tax relief up to a maximum of €500 will apply to each household.

Among hikes to pay for the €585m measures, the price of a packet of 20 cigarettes will break through the €10 barrier with a 40c increase from midnight.

A 25 gram pouch of roll-your-own tobacco will go up 20c in price.

Taxes are being frozen on alcohol, petrol and diesel and there will be no changes to motor tax or Vehicle Registration Tax.

“I am not raising any other taxes because I am able to fund the costs of these reforms and incentives through improved tax revenues arising from economic growth and continued expenditure restraint,” Mr Noonan said.

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