Measures will aid property market and job creation

A suite of measures to boost the property market and job creation have been announced by the finance minister.

Tax breaks for high-paid foreign workers are among the schemes which the Government hopes will boost overall employment and investment in Ireland.

Publishing the Finance Bill 2012, Michael Noonan outlined changes to a range of taxes and reliefs — many of which were flagged in the budget.

Further mortgage interest relief was announced for first-time buyers who purchased during the boom or who buy this year.

A separate relief programme to attract key skilled foreign workers or executives will give employees an exemption of income tax on 30% of their salary between €75,000 and €500,000. The scheme will be policed by the IDA.

Under the scheme, expected to cost the State between €3m and €5m a year, employees must be assigned to positions here for a minimum of one and a maximum of five years.

It is hoped the measure will attract skilled workers to research and development areas and that up to 100 employees could avail of it per year, the minister said.

Mr Noonan defended the move and said foreign executives getting the tax break would still pay large amounts in income tax.

A scheme to save Irish companies expanding in emerging markets such as Brazil, Russia, India, and China (the Bric countries) was also announced.

Companies which spend 60 days or more a year developing business in Bric countries will receive a tax relief called the foreign earnings deduction.

Mr Noonan said many measures in the bill were designed to create jobs.

“The model we’re pursuing is trying to get back to growth and prosperity to exports.

“If you’re working for a food company in Ireland and you’re trying to sell Irish butter in Peking (sic). You have to pack your case and fly out of Dublin and you’re out there for two or three months.

“You need a bit of incentive. It’s tough work, it’s tough work going around knocking on doors.”

Another 21 measures were outlined to boost employment in the financial services sector. A number of tax credits were also outlined for the R&D sectors. Companies will gain a 25% tax credit on R&D spending of up to €100,000.

Main points

* Mortgage interest relief increased to 30% for first-time buyers who took out first mortgage between 2004 and 2008

* 25% for first-time buyers who buy this year.

* Exemption threshold for universal social charge raised from €4,004 to €10,036. Anybody with an income below the latter figure will not pay the charge.

* Exemption from income tax on 30% of salary between €75,000 and €500,000 will be provided for skilled workers who relocate to the Irish-based operations of their employer for between one and five years.

* Changes aimed at boosting levels of research and development.

* Extra relief for farmers arising out of the budget decision to increase carbon tax.

* DIRT tax increased from 30% to 33%. State will now take 33c from every €1 of interest earned on deposits.

* Tax surcharge on incomes over €100,000 for those using property incentives to reduce their tax bill.

* Significant buildings and gardens which avail of tax relief for maintenance and restoration will have to be open to the public during National Heritage Week each year.