New rate of tax to help middle-income earners under consideration for budget 

While is widely expected the threshold for entering the higher rate of income tax will increase, the introduction of the extra 30% tax rate has not yet been ruled out

Finance Minister Paschal Donohoe and Housing Minister Darragh O’Brien at a site visit to the new development of social housing at O’Devaney Gardens in Dublin on Friday. Picture: Colin Keegan, Collins 

A third rate of tax to help middle-income earners is still being considered for inclusion in the upcoming budget.

Finance Minister Paschal Donohoe is finalising a review of how a third, middle rate of income tax would work and how it could be implemented after being requested to do so by Tánaiste Leo Varadkar.

While it is widely expected the threshold for entering the higher rate of income tax will increase as part of measures due to be announced in September's budget, the introduction of the extra 30% tax rate has not yet been ruled out.

Mr Donohoe said he was now considering "all options" as part of a €1bn taxation package

"I'm considering all options, even though we have brought the budget forward by a number of weeks, it's still many many weeks away and as is always the case with individual taxation measures, they are going to be commented on and debated by many, including those in Government, but I will confirm taxation proposals on the day of the budget."

It is understood the feasibility study of the extra tax band will be published in August as part of the Tax Strategy Group (TSG) papers.

Mr Donohoe said his department would be using the data to inform the decisions made on budget day.

The Programme for Government has a commitment in relation to helping workers that as their wages grow, they don't lose a larger share of their wages through tax.

"And if you ever needed to recognise the value of that commitment, it's at a time in which inflation is so high and it's at a time in which workers through their hard work, through the viability of their employers are getting wage increases that they need to cope with a higher cost of living.

"What the three parties have recognised is as this happens, we will do our best to ensure that a worker keeps in her purse or in his wallet the best share of what they have earned through their work," he said.

Mr Donohoe was visiting O’Devaney Gardens in Dublin with Housing Minister Darragh O'Brien, where 56 social homes are due to be completed by the end of the year.

The next phase of the scheme will deliver 1,047 homes, about 80% of which will be social and affordable.

“We’ve committed as a Government to €135m to that space and through that work, we want to see that on site this year," Mr O'Brien said.

We’re selling affordable homes as a State from €166,000 up. People will be buying affordable homes in Cork and Dublin.

“We’re going to have hundreds more of them this year and thousands more into next year."

He hit out at members of opposition parties who have opposed such development in towns and cities across the country, including the O'Devaney Gardens project.

“What they’re doing is, they’re stopping 56 families from getting their homes for life," said Mr O'Brien.