Budget sees limited tax changes

Minister for Finance Charlie McCreevy made few changes in relation to the personal tax system.

He said the measures he was introducing would have a total cost of €186m in a full year.

McCreevy increased Employee Tax Credit, which used to be known as PAYE allowance, by €140, from €660 to €800 per year. This increases the entry to the income tax system from €209 a week to €223 for employees.

Exemptions for those aged 65 and over has been increased from €13,000 for single people and €26,000 for married people to €15,000 and €30,000 respectively.

McCreevy also announced that he is increasing the mortgage tax relief available to first time buyers and will allow the current annual ceiling to be raised from €3,175 for single people and €6,350 for married couples, to €4,000 and €8,000 respectively. The minister said this would benefit 45,000 first time buyers.