Budget 2025 Q&A: Your PAYE tax breaks, mortgage relief and employee gift limit queries answered

This live Q&A is now closed. Thank you for all your interest. We hope we have managed to answer most of your queries. Dominic Coyle will try to tackle any we did not get around to in his regular weekly Q&A column.
Q: Parent died earlier this year, but probate has not yet been initiated. Will the new increased tax thresholds be applicable for their children and grandchildren? – Gillian
A: The new capital acquisitions tax (CAT) thresholds apply to gifts and inheritances taken on or after today. In the case of an inheritance, where the date of death is before today, then the old CAT thresholds are likely to apply to the inheritance. – BP
Q: My salary is €41,000 a year. How much will I benefit? Also, my wife works part-time on minimum wage, working more than 20 hours per week. How much better off will we be? – Jack
A: For a married couple, one earning €41,000 and the other earning €13,000, the tax savings announced in yesterday’s Budget will amount to circa €628 per year.
There is also an increase in the minimum wage from €12.70 to €13.50 per hour. – BP
Q: When do changes to capital acquisitions tax (CAT) thresholds come into effect? Will this date relate to the date of death, probate being awarded or filing a tax return? – Bróna Prior
A: The new CAT thresholds apply to gifts and inheritances taken on or after today. In the case of an inheritance, the date of death of the donor is generally the relevant date and therefore if the date of death of the donor is before today, then the old thresholds are likely to apply. – BP
Q: Small landlord tax relief: When did this come in? How much is it? – Noeleen
A: Residential Premises Rental Income Relief (RPRIR) is available to individual landlords of rental residential properties.
In 2024, landlords can claim tax relief of €600. This relief increases to €800 in 2025 and €1,000 for 2026 and 2027.
To qualify for the tax relief, landlords must agree to maintain their rental properties in the market for the entire duration of the scheme, up to the end of 2027. – BP
Q: Were there any updates made to the Bike2Work scheme to make it more accessible to all age groups?
A: There was nothing in Budget 2025 in relation to the Bike2Work scheme. – DC
Q: Were there any changes to small gift exemption? I send €3,000 a year to my cousin who can’t work, and this hasn’t changed in a decade when €3,000 went much further. – Caoimhín
A: There was no change in the amount you can receive annually under the small gift exemption. It remains at €3,000. – DC
Q: When does the fuel allowance for those over 66 come into effect? – Patrick McCarthy
A: The weekly rate of fuel allowance has not changed but the Minister for Social Protection did announce an increase in the means test “disregard” – as in the amount of weekly income not assessed as means – for people aged 66 and over.
It will now be €524 for a single person and €1,048 for a couple. The change will kick in in January. – DC
Q: Have there been any changes that effect motor tax for all fuel types? – Mr Joy
A: The only real impact on fuel prices was the increase in carbon tax. According to industry lobby group, Fuels for Ireland, it will lead to a two cent per litre increase for motorists. – DC
Q: Was the rent-a-room relief of €14,000 increased? – Mary
A: There was no change in the upper limit of tax-free income available under the rent-a-room scheme – currently €14,000.
If you stray even a euro over this cap, the entire €14,001 will be taxable so you need to be careful to stay within the limit, which includes not just rent but any other charges you levy on tenants, such as for laundry etc. – DC
Q: The additional €250 renters’ tax credit in 2024 – how will that be applied – split out over remaining months’ credits or in one month? – Sophie
A: You claim the rent tax credit via an annual return. Following the increase in the credit to €1,000 per person, and its backdating to include the current year in Minister Jack Chambers’ budget speech, you will be able to claim the full €1,000 relief this year, and again next year. – DC
Q: Were there any changes made to grants for green energy upgrades for private houses?
A: Most of the climate action measures focused on the business sector rather than residential. There was certainly no mention of changes to the level of grants available for energy upgrades to private homes.
The only measure than might impact on the cost of such projects was a reduction in the rate of VAT applying to the installation of heat pumps from the standard 23 per cent rate to 9 per cent. – DC
Q: Is the €125 increase in the tax credit divided between personal and PAYE tax credit or is it €125 for each? – Maeve
A: Each of the credits has been increased by €125, so you will now get a €2,000 personal tax credit, up €125 on last year, and also a €2,000 PAYE credit (known now as the employee tax credit), again up €125 on this year. – DC
Q: Has further clarification been given in relation to the tax exemptions for women impacted by the cervical smears?
Is it correct that any investments made with monies received in relation to the matter would be tax exempt? So, if an investment property is purchased or investments in stocks or bonds, any money achieved would be tax exempt (such as rental income, profits made)?
A: The cervical smear tax exemption was one of the less heralded budget measures ahead of the speech itself.
Minister for Finance Jack Chambers said he was introducing an exemption from income tax, capital gains tax, and capital acquisitions tax “on payments made to the women impacted by the failures in the CervicalCheck national screening programme”.
He added that the exemption from those taxes would apply also to “future and historic income and gains” the women affected made as a result of how they invested that money.
On the surface, that would suggest your interpretation is correct but we will have to wait until the Finance Bill is published on October 10th – Thursday of next week – to see the full detail. – DC
Q: When do new capital acquisitions tax (CAT) thresholds take effect if you have had probate but are still due to pay your inheritance tax by October 31st? – Ross Mathews
A: The new CAT thresholds apply to gifts and inheritances taken on or after today.
An inheritance is generally treated as taken on the date of death of the donor so where that date is before today, then the old CAT thresholds are likely to apply.
The answer might be different if the estate were held in a will trust and the assets were appointed out to a beneficiary from the will trust on or after today. – BP
Q: Has entrepreneur relief tax changed? – Stephen
A: There have been no changes to entrepreneur relief announced in the budget, but there has been changes to angel investor relief.
This relief is targeted at encouraging business angel investment in innovation start-ups. It is proposed to increase the lifetime limit on gains, on which the reduced rate of capita; gains tax applies, from €3 million to €10 million. – BP
Q: Was there an increase in the vacant home/derelict home grant? – Laura
A: The rate of the vacant homes tax is being increased from five times to seven times a property’s existing local property tax liability. This increase will take effect from the next chargeable period, commencing November 1st. – BP
Q: What does the €1,100 reduction to childcare costs actually mean? Are the fees set to come down again? – Jean
A: This is where budgets can be all “smoke and mirrors”. The Minister for Public Expenditure and Reform, Paschal Donohoe, made big play of allocating 44 per cent more funds to the National Childcare Scheme.
“This investment will mean that, next year, parents will see full-time childcare costs reduce even further by an additional €1,100,” he said with a flourish.
Except it won’t.
We assumed from his words that the €2.14 an hour universal childcare subsidy would rise to €2.61 – giving parents that “additional €1,100″ reduction he was so taken with.
But no, despite the obvious meaning of his words, further guidance from ministerial advisers and press officers clarified that he was simply authorising the funding required to pay for the increase to €2.14 announced last year but which came into effect on September 1st of this year.
So lots of fanfare but it actually means parents juggling the cost of childcare got nothing in this budget. – DC
Q: Has there been any change in health and safety benefit in line with maternity benefit increase? – Aoife
A: The weekly rate of health and safety benefit will rise by €12 from January to €244 in line with other social welfare payments. Payments for qualified adults (up €8 to €162) and qualified children (up €4 if under 12 to €50 and up €6 to €62 if older) also rise. – DC
Q: I intend to transfer a property worth €460,000 to my son. The threshold has increased from €335,000 to €400,000 in Budget 2025. What is his capital gains tax (CGT) now? I have not gifted my son €3,000 for this year. When is it applicable from?
A: If you transfer a property to your son, there are three taxes that need to be considered: CGT for transferor, capital acquisitions tax (CAT) for the beneficiary, and stamp duty.
CGT is payable on the difference between the purchase price of the asset and its current market value. This gain is taxed at 33 per cent.
CAT is payable on the excess above the unused threshold at a rate of 33 per cent. Assuming the property is residential, then stamp duty at a rate of 1 per cent would also apply to the transfer.
If CGT is payable by the donor on the transfer, then this can be credited against the beneficiary’s CAT liability assuming the beneficiary retains the asset for two years.
In this case, assuming no CGT is payable and assuming the beneficiary has not received any prior gifts or inheritances from his parents, then he would have a CAT liability of €18,810 on the transfer of the property.
It would be important to get tax and legal advice, based on your specific circumstances, in advance of making any transfers. Assuming the property is a residential property, stamp duty of €4,600 would also be payable. – BP
Q: I am in the process of selling the assets in my company that I have owned with my wife for 16 years. I am in my 40s. Will I qualify for the new capital gains tax retirement relief, and the 12 year limit, or would I need to be over 55?
A: As you suspect, you need to be at least 55 to qualify for retirement relief from capital gains.
However, it sounds as though you should be eligible for entrepreneur relief which would allow you to pay capital gains tax at a reduced rate of 10 per cent on the first million euro of any gain you make on this sale. – DC
Q: Is there any way of receiving the rental tax credit if you are in an unregistered rental?
A: In general, to qualify for the Rent Tax Credit – which was increased in the budget from €750 to €1,000 – your tenancy/property needs to be registered with the Residential Tenancies Board.
The only exceptions to this are for people who are staying in someone’s house under the ‘rent-a-room’ scheme or an old-style ‘digs’ arrangement. – DC
Q: Can you please explain the changes to IVF scheme? – Deirdre
A: No detail has yet been provided beyond a very general statement that free access to IVF treatment will be expanded. What treatments, by what people and to what limit is unknown as we speak.
We might hear more detail from the Department of Health in the next day or so, or we might have to wait for the HSE’s 2025 national service plan. – DC
Q: If I have previously made gifts up to the threshold for tax from parents, can I now give more – up to the new threshold? – Mark
A: Yes. Assuming you mean that you have already given a child gifts up to a cumulative value of €335,000, you can now make a further €65,000 in gifts to those same people while staying under the new threshold of €400,000.
In addition, outside the capital acquisition tax thresholds, you can give anyone €3,000 every year without either party facing any tax liability under the small gift exemption.
That also means that the €3,000 of anything you have given this person/people up to now in each tax year is discounted in calculating how they stand in relation to the tax free threshold. – DC
Q: I committed to my mortgage in Aug 2023, is there anything available under the Mortgage interest tax credit for people in that position? Seems you need a balance at Dec 2022? – Gearóid
A: The Mortgage Interest Tax Credit provides relief only to people who had an outstanding mortgage balance of between €80,000 and €500,000 at the end of 2022 on their principal private residence (main family home).
So, as you suspect, you will not benefit because you only took out your mortgage last year. – DC
Q: If my child is born in December 2024, will I be entitled to the double child benefit payment in December and/or the baby boost in January?
A: Child benefit commences the month after your child is born, and is payable on the first Tuesday of every month while your child is still eligible. On that basis, you would appear to miss out on the double payment in December.
However, it is possible that some allowance will be made when the social welfare bill enacting the various social welfare provisions is published and debated in the Oireachtas. We will just have to wait and see.
It appears that you will certainly miss out on the “baby boost” payment as, according to the Department of Social Protection, it applies only to children born on or after January 1st next year. – DC
Q: I earn €58,000 and am a single person. Will I pay more or less tax? By How much?
A: For a single person earning €58,000, the tax savings announced in yesterday’s budget will amount to circa €931. – BP
Q: Is the new 6 per cent for stamp duty on the total property price or on the portion above €1.5 million? If house is €2 million, 6 per cent is €120,000? – Dave
A: The new higher 6 per cent rate of stamp duty on property purchases will apply only to the amount above €1.5 million, not on the total price. – DC
Q: Any change in the exit tax rate of 41 per cent for investments? – Jim
A: No changes to the exit tax rate that applies to funds have been announced in the budget. That said, the Minister did mention in his speech that he will be bringing a report to Government shortly on the funds industry. – BP
Q: Were there any tax breaks for two PAYE earners? – Monica Barrett
A: Yes, there were favourable tax changes announced in the budget which apply to PAYE workers.
The standard rate income tax band has been increased by €2,000. There are also changes to USC, increasing the ceiling of the 2 per cent rate by €1,622 to €27,382, cutting the 4 per cent rate to 3 per cent.
There were also increases of €125 to the PAYE and personal tax credits. – BP
Q: Me and my wife are both pensioners. Do we both get bonus pension? – Thomas
A: You do. The October and Christmas bonuses are paid to each long-term recipient of social welfare, such as a State pension. – DC
Q: Is Working Family Payment regarding as a social welfare payment and will they be included in the lump sum bonus payments this budget 2025? – Kellie
A: The Working Family Payment is managed through the Department of Social Protection along with all other welfare payments. Recipients will benefit from a €400 lump sum payment in November. – DC
Q: Will student administration fees be reduced by €1,000 as per last two years? Also, can I claim tax relief as I have two sons in third level education? – Catherine McNulty
A: The €1,000 relief on third level student contributions is being extended which means the maximum college students can be charged is €2,000.
As regards tax relief, those rules have not changed. You cannot claim relief on the first €3,000 in fees paid, so, in your case, with two sons in third level for whom, between them, you are paying fees of €4,000, you can claim relief on €1,000 of that sum. – DC
Q: Why not allow parents gift a holiday home or a second home to child who has no home? Does the state prefer to give social housing? – Me
A: You can currently gift a home, or a second home, to a child. If it is valued below the capital acquisitions tax limit of €400,000, there will be no tax bill for the child – although the parent will have a capital gains tax issue in relation to any rise in the value of a second home between the time it was acquired and the time it was transferred to a child. – DC
Q: If the Help To Buy property price limit is increased from €500,000 in the budget, will it come into effect straight away or will it be 2025? If you were yet to drawdown a mortgage but had paid your deposit and expected to draw down before the end of 2024 could you claim this credit? – Séan
A: There was no increase in the €500,000 cap on the price/value of a property qualifying for Help to Buy. The only mention of the scheme in the budget was its extension to 2029, which had been expected. – DC
Q: Why has the Government not raised the means test income limit for over 70s to qualify for the medical card? – Tom
A: We have yet to hear from Minister for Health Stephen Donnelly and his department post-budget but there has been no indication that means test income limits for those over 70 will be adjusted from their current levels of €550 a week for a single person and €1,050 for a couple.
Those limits have been in place, unchanged, for the past four years. Given the pressure on spending in that department, there is no expectation of any change this time around. – DC
Q: Has the pay related job seekers benefit come into effect as it was scheduled for October 1st? While legislation was passed and is separate to the budget, there has been no mention. – Mary
A: According to the Department of Social Protection, the Jobseeker’s Pay-Related Benefit Scheme will now come into effect on March 31st, 2025. – DC
Q: Currently, I am over the threshold for fuel allowance, but next year I will not be. Will I get it from January or from September 2025? – Aidan Wilson
A: It depends on when you meet the eligibility requirements and when you apply. As a general principle, the department encourages application before the start of the winter fuel allowance “season” – ie before it kicks in in September of a given year. This is because payments will not be backdated.
However, if you qualify midway through the winter season, you should make an application via myWelfare.ie. The forms are also available in your local Intreo office or at your local post office. – DC
Q: Does the €1,500 up from €1,000 employee gift limit increase apply to gifts in calendar year 2024 – Martin H
A: It was not stated specifically but standard practice and the need for the passing of the Finance Bill to bring the measure into effect points to it being operational for 2025, not this year.
Apart from raising the Small Benefit Exemption threshold to €1,500, it will give employers more flexibility by allowing tax free payments under the scheme to be issued to staff as often as five times a year (within that annual cap of €1,500) rather than just twice a year at present. – DC
Q: What’s the weekly increase in the old age pension? – Eithne
A: Along with other social protection payments, the weekly rate of the State pension rises by €12 to a maximum rate of €289.30 for those under the age of 80 on the contributory state pension and €299.30 for those who have turned 80.
For those on the means-tested non-contributory State pension, the equivalent maximum weekly rates are €278 and €288. – DC
Q: Is the Universal Social Charge (USC) point of liability €13,000 being increased this year?
A: There were changes in the USC regime but not to the entry point. It remains the case that if your income is below €13,000, you will not pay USC at all. If your income is over that level, you will pay USC.
The main changes are to the higher USC rate of 4 per cent, which drops to 3 per cent and a widening of the income band on which the 2 per cent rate applies – to €27,382 from €25,760.
Of course, if you are over the age of 70 (or a medical card holder under that age) and your income is no more than €60,000, you will never pay more than 2 per cent USC. – DC
Q: The free school books programme currently excludes children attending fee paying schools. Does the expansion of the programme to Leaving Cert cover all children equally, or are they still excluded? – Dominic
A: Minister Paschal Donohoe did extend the free books scheme to all transition and senior cycle (fifth and sixth year) pupils.
However, there is no other change to eligibility and he did state in his speech that the scheme was confined to pupils “within the free education scheme”, so private school students will not benefit from the extension of the free books scheme. – DC
Q: My husband and I have signed contracts to purchase a property worth €1.65 million. The sale is due to close on October 30th, 2024. What will our stamp duty liability be? Will it be impacted by the new 6 per cent rate? – Kathleen O’Shea
A: The new 6 per cent stamp duty rate should not apply, and your stamp duty should be circa €23,000 provided you have signed binding contracts before today, the sale completes before January 1st and the necessary certificates are included in the transfer instrument.
If these transitional arrangements are not met, then the existing rate of 1 per cent will apply to the first €1 million, and the 2 per cent rate will apply to the next €500,000, with the excess over €1.5 million liable to 6 per cent duty. – BP
Q: When does the increase in the size of pension pots free of tax kick in? – From Gerry
A: The Minister for Finance, Jack Chambers, recently announced that the Standard Fund Threshold (SFT) for pensions will increase by €200,000 per year beginning in 2026 until 2029 (after which the level of SFT will move with the applicable level of wage growth).
Despite the rise, the maximum tax-free lump sum remains at €200,000. In addition, no change has been announced to the additional €300,000 in retirement lump sums which is taxable at the standard tax rate of 20 per cent. – DC
Q: Is there anything in this budget on EV cars and incentivising further their purchase? Anything on widening the amount one does not pay tax if one to rent a room in their own home? – From AJ
A: Budget 2025 includes a number of incentives in relation to electric vehicles, such as a new BIK exemption on home chargers installed by employers at the home of an employee or director and an extension of the €10,000 threshold on BIK for cars for 2025.
There has been no changes to the Rent a Room Scheme announced in the budget which lets you earn up to €14,000 per tax year tax-free if you rent a room in your home to private tenants. – BP
Housing
From Paul
Q: We entered into binding contracts to purchase a new home a number of weeks ago. The sale is due to close next week. The purchase price is in excess of €1.5 million.
Do we have to pay the 6 per cent rate over €1.5 million even though binding contracts were executed long prior to stamp rate change in today’s budget?
A: A 6 per cent rate of stamp duty was introduced with effect from today for the purchase of residential property valued at above €1.5 million.
The existing rate of 1 per cent will still apply to the first €1 million, and the 2 per cent rate will apply to the next €500,000, with the excess over €1.5 million liable to 6 per cent.
Transitional arrangements will apply for deals where binding agreements have been entered into before today and that are completed before January 1st (where certain certification is included in the transfer instrument). – BP
Housing
From Barry Aston
Q: Mortgage interest relief remains in place for 2025. Are there limitations to those who can access, or is the relief accessible to all mortgage holders?
A: Mortgage interest tax relief, which was introduced on a temporary basis in Budget 2024, is being extended by one further year.
Qualifying homeowners will be eligible for the relief in respect of the increased interest paid on their mortgage in the calendar year 2024 over the calendar year 2022 at the standard rate of income tax (20 per cent), capped at €1,250 per property.
There is no change to the qualifying criteria for the relief, including the qualifying homeowners must have an outstanding mortgage balance on their PPR of between €80,000 and €500,000 on December 31st, 2022. – BP
Tax
From Geraldine O’Callaghan
Q: What is the capital gains tax allowance between siblings?
A: Capital acquisitions tax covers large gifts (over €3,000 in a year) and inheritances and, from today, the maximum you can receive from a sibling is €40,000 – up from €32,500 previously.
However, that €40,000 limit covers all large gifts and inheritances you have received from any brother or sister since December 5th, 1991.
Anything you got since then from a grandparent, a great-grandparent or a uncle or aunt related by blood is also taken into account.
So if you are fortunate in your relatives, you can hit even that new threshold quite quickly. Capital gains tax relates to something different – profit made on the sale of assets – though the 33 per cent tax rate is the same. – DC
Tax
From Tadhg O’Brien
Q: Is there any change to the deemed disposal tax?
A: No changes were announced to the deemed disposal regime for fund investors. It may be that something emerges in the Finance Bill as Minister Jack Chambers did say that he had recently received the report of the Funds Review Team which was examining this and related issues.
However, I wouldn’t hold your breath. He said he intended to bring the report to Government “shortly”, then publish it and, “following consideration of the findings”, outline the next steps.
Given the timings involved and the likelihood of a general election, I think it is more likely that any real change will not happen until next year. – DC
Infrastructure
From Shakib Ahmed
Q: What does this budget do for public transportation?
A: From the user side of things, the discounted fares will continue to the end of next year. Free public transports will now be widened to include all children under the age of nine, up from five previously. That apart, the Minister said the allocation to Transport would allow for capacity improvement and the roll out of new services. – DC
Tax
From Noel Hanney
Q: Was there any reduction in USC for taxpayers over 70?
A: There is no change in Universal Social Charge rates for people over the age of 70, unless their income is over €60,000 a year in which case they will benefit from the one percentage point reduction in the 4 per cent rate (to 3 per cent) and the widening of the 2 per cent income band. – DC
Social Welfare
From William Shea
Q: Was there any increase in the living alone allowance from €22 apart from lump sum of €200?
A: The weekly rate of the living alone allowance remains unchanged at €22. The only increase, as you note, is the €200 lump sum payment under the cost of living package. – DC
Tax
From Clare
Q: Can a single person with no children elect a person to bequeath their estate to? Who can then receive the equivalent tax free allowance as a child would? Is there any way to bequeath your estate as a single person with no children without the government getting such a large chunk?
A: There is no facility to avail of the most generous Category A tax free threshold – now €400,000 – unless you have children.
If you are a single person, any beneficiary will pay tax at 33 per cent on anything you leave them over €40,000 if they are a sibling, a niece or a nephew, or €20,000 otherwise …and that is if they have not inherited before from anyone to whom they have a similar relationship. – DC
Education
From Richie
Q: Does the €1,000 education benefit apply to postgraduate and evening courses?
A: Under the cost of living package outlined by Paschal Donohoe, the State contribution to postgraduate tuition fees does increase by €1,000, but only for those in receipt of a student grant. – DC
Tax
From Conor
Q: If I am purchasing a house for €2 million, does the following stamp now apply:
A: That is the case. You will pay €50,000 in stamp duty on a property valued at €2 million, compared to €30,000 on the same property before yesterday’s budget, a difference of €20,000 in the purchase cost for you.
When this applies depends on where you are in the process. It kicks in from today if you have not already signed a binding contract.
However, if you have a binding contract signed before close of business yesterday – and I gather there was a flurry of such activity – then you have until January 1st to conclude the deal and pay stamp duty under the old regime. After January 1st, it will apply regardless to all sales. – DC
Pensions
From Yvonne
Q: Is there any change to pension limits from €2 million?
A: Changes to the €2 million cap on tax relief for pensions under what is called the Standard Fund Threshold were already announced by the Minister last month. There was no further announcement made in the budget. – DC
Social Welfare
From Michael O’Sullivan
Q: Has the disability weekly payment increased?
A: As with all social protection payments, the means tested Disability Allowance weekly payment will increase by €12 from January next to a maximum of €244.
There will be an €8 rise in the additional qualified adult payment, where applicable, to €162 and the related child support (increase for a qualified child) weekly payments will be €4 higher for a child under the age of 12 at €50 and €6 higher for older children at €62.
The maximum rate of the non-means tested Disablement Benefit will also be €12 a week higher at €275. – DC
Business
From John Fahy
Q: Are there any changes to entrepreneur relief or retirement relief, which was promised as small businesses are being discriminated when it comes to exit?
A: No changes to entrepreneurs’ relief were announced in the budget. However, there was a positive change to Angel Investor Relief, which is targeted at encouraging business angel investment in innovative start-ups, which was announced in Budget 2024 and will commence shortly.
It is proposed to increase the lifetime limit on gains, on which the reduced rate of capital gains tax (CGT) applies from €3 million to €10 million.
CGT retirement relief also got a mention in the budget. The age limit increase from 66 years to 70, which was included in Budget 2024, is to be retained.
While somewhat unclear, it would appear that the €10 million cap which was also included in Budget 2024, may be replaced with a requirement for the beneficiary to hold the business assets for a period of 12 years in order to avoid a clawback of the relief.
We will need to see the detail in the Finance Bill to be able to confirm the position. – BP
Universal Social Charge
From Hazel Farley
Q: How is the cut in USC applied if you earn over €70,044? Do I pay 3 per cent up to the maximum and 4 per cent over €70,044?
A: There have been some changes to the USC. The ceiling of the 2 per cent rate increased by €1,622 to €27,382 and the 4 per cent rate has been reduced to 3 per cent. The 8 per cent USC rate still applies to incomes over circa €70,000. – BP
Tax
From Rebecca
Q: Can you tell me what the new capital gains tax will be? I have a property which I am selling.
A: Unfortunately there has been no changes to the capital gains tax rate, which is currently 33 per cent. – BP
Tax
From Rob
Q: Do we know from what date the capital acquisitions tax threshold increases will kick in, and, if we have already settled a capital acquisitions tax payment with Revenue for an inheritance received earlier in the year, will we be entitled to a refund?
A: The new capital acquisitions tax thresholds only apply to gifts and inheritances taken on or after today. – BP
Tax
From Ross
Q: As a single person, what does this budget mean to me?
A: There have been a number of tax changes which might apply. The entry for the 40 per cent income tax rate has been increased by €2,000.
There have also been a number of changes to the USC such as increasing the ceiling of the 2 per cent rate by €1,622 to €27,382 and cutting the 4 per cent rate to 3 per cent.
The Rent Tax Credit has also been increased by €250 for those who are renting. – BP
Tax
From Joan
Q: Have any changes been made to inheritance tax in terms of sister to sister? Has the threshold been raised from the paltry €30,000?
A: Yes, the group B tax free threshold (which applies to gifts and inheritances between close relatives) has been increased from €32,500 to €40,000. This change applies to gifts or inheritances taken on or after today. – BP
Tax
From Mary Cullen
Q: Is there any talk of reducing CAT for group B or C? For someone not married or who has no family and wishes to leave their estate or part of to a nephew or niece? Those groups are crucified with a huge tax bill. Very unfair as they would have paid huge tax in their working career and these groups may be their only family. Has the government even considered this?
A: There has been a small change to the group B and group C tax free thresholds. The group B threshold has increased to €40,000 (from €32,500) and the group C threshold has increased to €20,000 (from €16,250). – BP
College
From John
Q: What action has been taken on third level fees?
A: Similar to last year, a once off €1,000 reduction in the student contribution fee has been included in the budget. – BP
Inheritance
From Sean
Q: My father passed last year and we obtained grant of probate for his will in August this year. I am preparing to make my inheritance tax return before the end of October. Will I be assessed according to the old or new rules then?
A: You will be assessed on the tax free threshold that was in place when he died, so €335,000 in your case. That threshold includes any other gift over the value of €3,000 you may have received from either parent and also any inheritance you may already have received from your mother if she predeceased your father. – DC
Tax
From Joseph F Murray
Q: What weekly benefit will a married couple, on combined salary of €90,000, see from the changes made in USC and income tax? Thank you.
A: There have been increases to the entry level for the 40 per cent income tax rate and also to the USC, which should mean an increase in take home pay.
The level of the increase in take home pay will depend on your individual circumstances. For an accurate calculation of the tax savings based on your individual circumstances please see our budget calculator.
Business
From Sean Brennan
Q: Has the cap on retirement relief been scrapped?
A: The commentary in the budget is a little unclear, but my reading is that the €10 million cap that was introduced in Budget 2024 will be replaced with a requirement that the beneficiary must keep the business assets for 12 years. We will need to see the detail in the Finance Bill to be able to confirm the position. – BP
Tax
From Karen
Q: A close family member died this past Spring – probate is still not underway. Will the new inheritance threshold apply to us? Is the threshold amount linked to the date of death or to the date probate is granted?
A: You generally look at the date of death as being the relevant date. So if the person has died before today then the new CAT thresholds are unlikely to apply.
The answer might be different if the assets pass into a trust on the death of the deceased. In this case, the appointment of the assets from the trust would generally be the relevant date, and where that date is on or after today, then the new CAT thresholds should apply. – BP
Tax
From Mary McCarthy
Q: My husband and I both pay 42 per cent tax. We own our home and have no children. We both pay USC. What is there for us in the budget?
A: Well, you will benefit from the widening of the standard (20 per cent) income tax band by €2,000 to €44,000 if you are taxed as single people. If taxed as a couple, the 20 per cent band for the higher earner rises by €2,000 to €53,000, with the 20 per cent widening to €35,000 for the lower earner – again a €2,000 increase.
The widening of the 2 per cent band of Universal Social Charge by €1,622 to €27,382 will also benefit you as will the €125 per person increase in both the personal tax credit and either the employee or the earned income tax credit. All those credits will now be worth €2,000 apiece, up from €1,875. – DC
Childcare
From Jean
Q: What does the €1100 reduction to childcare costs actually mean? Are the fees set to come down again?
A: As of now, you are subsidised by €2.14 an hour for up to 45 hours a week under the universal (non means tested) childcare subsidy. That figure will rise by 47 cent to €2.61 an hour. The increase will also apply to the Income Assessed (means tested) subsidy. – DC
Business
From Michael McDowell
Q: Any changes to Employment Investment Incentive Scheme for angel investors and startups?
A: The angel investor capital gains tax relief, which is targeted at encouraging business angel investment in innovative start-ups, was announced in Budget 2024, and will commence shortly.
It is proposed to increase the lifetime limit on gains, on which the reduced rate of capital gains tax applies, from €3 million to €10 million. – BP
Tax
From Sean Brennan
Q: Will the cap on the transfer of family business of €10 million be scrapped or deferred?
A: The commentary in the budget is a little unclear, but my reading is that the €10 million cap that was introduced in Budget 2024 will be replaced with a requirement that the beneficiary must keep the business assets for 12 years. We will need to see the detail in the Finance Bill to be able to confirm the position. – BP
Tax
From Jean Carmena
Q: Will inheritance tax threshold increase apply to estates currently in probate?
A: No, the new rates come into force only for estates of people who die from today onwards – October 2nd. – DC
Tax
From Deborah Ryan
Q: Any changes to Inheritance Tax?
A: Yes, some good news on the thresholds! The group A threshold which generally applies to gifts and inheritances to children has been increased from €335,000 to €400,000. The group B threshold (which applies to close relatives) has been increased to €40,000 (from €32,500) and the group C threshold has been increased to €20,000 (from €16,250). These changes come into effect for gifts and inheritance from October 2nd. – BP
Housing
From Gearóid Dardis
Q: Are self-employed people able to avail of the Renters Tax Credit?
A: Yes, anyone who is renting should be able to avail of the Rent Tax Credit. This credit is being increased by €250 to €1,000 for a single person or €2,000 in the case of a married couple who are jointly assessed. The increase applies to 2024 and 2025. – BP
Good morning and welcome to our Budget 2025 Q+A.
Yesterday’s budget, with an election around the corner and a recent boon in tax receipts, was billed as the biggest bonanza budget in the history of the State, and in some respects, it has lived up to that billing.
Here we are going to dig down into the detail of what it all means for you with Dominic Coyle of The Irish Times and Beryl Power from PwC.