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Budget 2008

Intorduction

The main Budget changes which may affect people living in Ireland are set out below.

This document sets out improvements and increases in the areas of tax, social welfare, health, environment etc.

For a full list of changes, please read the Department of Finance's Summary of Budget Measures.

It also contains other changes which have been announced since 5th December. the document will be reviewed and updated regularly until 21st December.

Social Welfare

The total cost of changes to social welfare benefits and children's payments is €957 million in 2008 and €980 million in a full year.

General changes to payments

The following payments increase by €12 per week:

  • Jobseeker's Benefit
  • Jobseeker's Allowance
  • Supplementary Welfare Allowance
  • Pre-Retirement Allowance
  • Farm Assist
  • One-Parent Family Payment
  • Health and Safety Benefit
  • State Pension (Non-Contributory)
  • Widow's and Widower's (Contributory) Pension (under 66)
  • Widow's and Widower's (Non-Contributory) Pension
  • Deserted Wife's Allowance
  • Deserted Wife's Benefit (under 66)
  • Death Benefit Pension (under 66)
  • Guardian's Payment (Contributory)
  • Guardian's Payment (Non-Contributory)

This increase applies to the full-rate payment. There are proportional increases for people getting reduced payments (January 2008).

Qualified Adult Increases

Qualified Adult Increase for State Pension (Contributory), State Pension (Transition) and Invalidity Pension (over 66) increase by up to €27 per week.

Qualified Adult Increase for State Pension (Contributory) and State Pension (Transition) (under 66) increase by up to €9.30 per week.

Qualified Adult Increase for State Pension (Non-Contributory) (under 66) increases by 7.90.

Qualified Adult Increase for Invalidity Pension (under 66) increases by €8.60 per week.

Qualified Adult Increases for the following payments increase by €8 per week:

  • Jobseeker's Benefit
  • Jobseeker's Allowance
  • Supplementary Welfare Allowance
  • Pre-Retirement Allowance
  • Farm Assist
  • Health and Safety Benefit
  • Illness Benefit
  • Disability Allowance
  • Blind Pension
  • Injury Benefit
  • Incapacity Supplement

This increase applies to the full-rate payment. There are proportional increases for people getting reduced payments.

The upper income limit for entitlement to a Qualified Adult payment increases by €20 (from €280 to €300 per week) for the following payments:

  • State Pension (Contributory)
  • State Pension (Transition)
  • Invalidity Pension
  • Jobseeker's Benefit
  • Health and Safety Benefit
  • Illness Benefit
  • Injury Benefit

(January 2008)

Older people

The maximum rates of the following pensions increase by €14 per week:

  • State Pension (Contributory)
  • State Pension (Transition)
  • Invalidity Pension (for people who are 65)
  • Widow's and Widower's (Contributory) Pension (over 66)
  • Deserted Wife's Benefit (over 66)
  • Death Benefit Pension (over 66)

State Pension (Non-Contributory) increases by €12. This increase is proportional for reduced payments.

There is a special Qualified Adult increase of up to €27 per week for State Pension (Contributory), State Pension (Transition) and for Invalidity Pension (over 66). This special increase is incrementally bringing the Qualified Adult Increase for pensions in line with the full personal non-contributory pension rate. (January 2008).

In addition the upper income limit for entitlement to a Qualified Adult payment increases by €20 (from €280 to €300 per week) for State Pension (Contributory) and (Transition) (January 2008).

People with disabilities

The following disability payments increase by €12 per week:

  • Disablement Pension
  • Illness Benefit
  • Disability Allowance
  • Blind Pension
  • Injury Benefit
  • Incapacity Supplement
  • Invalidity Pension (for people under 65)

This increase applies to the full-rate payment. There are proportional increases for people getting reduced payments (January 2008).

In addition the upper income limit for entitlement to a Qualified Adult payment increases by €20 (from €280 to €300 per week) for the following payments:

  • Invalidity Pension
  • Illness Benefit
  • Injury Benefit

(January 2008)

Carers

All carer's payments increase by €14 per week:

  • Carer's Allowance
  • Carer's Benefit
  • Constant Attendance Allowance

This increase applies to the full-rate payment. There are proportional increases for people getting reduced payments.

Half-rate Carer's Allowance increses by €7 a week.

Carer's income disregard increases by €12.50 to €332.50 per week for a single person and by €25 to €665 per week for a couple (April 2008).

Earnings threshold for Carer's Benefit increases by €12.50 to €332.50 per week (April 2008).

Any amount of Carer's Benefit, in excess of the basic Supplementary Welfare Allowance (SWA) rate, will be disregarded for the purposes of Rent and Mortgage Interest Supplement (in line with existing arrangements for Carer's Allowance) (April 2008).

Respite Care Grant increases by €200 to €1,700 (June 2008).

Families and children

Child Benefit rates increase by €6 for the first two children and €8 for the third and subsequent children. Rate for first two children will be €166 per month (each) and rate for third and subsequent children is €203 per month (each) (April 2008).

Early Childcare Supplement increases by €100 per child aged under 6 per year to €1100 (first quarter 2008).

Qualified Child Increase is raised to €24 (€2 increase) per week (January 2008).

Back to School Clothing and Footwear Allowance increases by €20 per child. For children aged 2-11 the Allowance increases from €180 to €200 and for children aged 12-22 from €285 to €305 (June 2008).

Widowed Parent Grant increases by €2,000 from €4,000 to €6,000 (5 December 2007).

All Family Income Supplement (FIS) income thresholds increase by €10 per week per child (January 2008).

Upper income threshold for One-Parent Family Payment increases by €25 (from €400 to €425) (May 2008).

PRSI, health and pension contributions and trade union subscriptions will be disregarded in assessment of earnings for One-Parent Family Payment (May 2008).

One-Parent Family Payment

Increase of €25 in the upper income threshold for One-Parent Family Payment, from €400 to €425 per week (May 2008).

PRSI, health and pension contributions and trade union subscriptions will be disregarded in the assessment of earnings for One-Parent Family Payment (May 2008).

Jobseeker's Allowance

A single reformed method for assessing benefit and privilege from parental income will be introduced (April 2008).

Maternity and Adoptive Benefit

Increase of €14 per week in the minimum rate of Maternity and Adoptive Benefit to €221.80 per week (January 2008).

Back to Education

The Cost of Education Allowance will increase by €100 to €500 per year and will be extended to Back to Education credit only cases (academic year 2008).

National Fuel Scheme

The duration of the fuel season will be extended by 1 week in April from 29 weeks to 30 weeks (April 2008).

Household Benefits Scheme

Entitlement to the Natural Gas Allowance will be extended to include customers who use gas which is not delivered via the national grid (January 2008).

Funding

Funding will be allocated in 2008 as follows:

Family Support Programme gets additional funding of €500,000 for the Activation and Family Support Programme.

The Family Support Agency gets additional funding of €1.27 million for marriage, child and bereavement counselling and other services.

Money Advice and Budgeting Service (MABS) companies get additional funding of €250,000 for staffing and development costs.

Citizens Information Board (CIB) will receive additional funding of €1.8 million in 2008.

Schedule for increases

January

Pensioners who are paid by electronic methods will receive their increase in full.

Increases for recipients of Jobseeker's Benefit/Allowance, Illness/Maternity Benefit, One-Parent Family Payment, Family Income Supplement, Farm Assist and Supplementary Welfare Allowance will be paid in full.

February

Recipients of certain long-term payments (who are paid by payable order book) such as Widow's/Widower's Pensions, Carer's Allowance and Invalidity Pension will get their increase in mid-February back dated to January along with their new payable order books.

April

Child Benefit customers will receive their increase from April 2008.

Social Welfare Rates of Payment

Social Insurance Payments (weekly)

Present

New

State Pension (Contributory)

- under age 80

209.30

223.30

- aged 80 and over

219.30

233.30

State Pension (Transition)

- age 65

209.30

223.30

Widow's/Widower's (Contributory) Pension/Deserted Wife's Benefit

- under age 66

191.30

203.30

- aged 66 and under age 80

209.30

223.30

- aged 80 and over

219.30

233.30

Invalidity Pension

- under age 65

191.30

203.30

- aged 65

209.30

223.30

Carer's Benefit/Constant Attendance Allowance

200.70

214.70

Disablement Pension

216.90

228.90

Jobseeker's/Illness/Health & Safety/Injury Benefit

185.80

197.80

Maternity/Adoptive Benefit - Minimum rate

207.80

221.80

Guardian's Payment (Contributory)

158.00

170.00

Social Assistance Payments (weekly)

Present

New

State Pension (Non-Contributory)

- aged 66 and under age 80

200.00

212.00

- aged 80 and over

210.00

222.00

Carer's Allowance

- under age 66

200.00

214.00

- aged 66 and over

218.00

232.00

Blind Pension

185.80

197.80

Widow's/Widowers's (Non-Contributory) Pension/ Deserted Wife's/ Prisoner Wife's Allowance

185.80

197.80

One-Parent Family Payment

185.80

197.80

Pre-Retirement/Disability Allowance

185.80

197.80

Supplementary Welfare Allowance

185.80

197.80

Jobseeker's Allowance

185.80

197.80

Farm Assist

185.80

197.80

Guardian's Payment (Non-Contributory)

158.00

170.00

Qualified Adult Rates

Social Insurance Payments (weekly)

Present

New

State Pension (Contributory)/(Transition)

- under age 66

139.50

148.80

- aged 66 and over

173.00

200.00

Invalidity Pension

- under age 66

136.50

145.10

- aged 66 and over

173.00

200.00

Jobseeker's/Illness/Health & Safety/Injury Benefit

123.30

131.30

Qualified Adult Rates

Social Assistance Payments (weekly)

Present

New

State Pension (Non-Contributory)

132.20

140.10

Blind Pension

123.30

131.30

Pre-Retirement/Disability Allowance

123.30

131.30

Supplementary Welfare Allowance

123.30

131.30

Jobseeker's Allowance

123.30

131.30

Farm Assist

123.30

131.30

Child Benefit (monthly)

Number of Children

Present Rate €

New Rate €

1 child

160

166

2 children

320

332

3 children

515

535

4 children

710

738

5 children

905

941

6 children

1,100

1,144

7 children

1,295

1,347

8 children

1,490

1,550

Family Income Supplement (weekly)

Number of Children

Present Income Limit €

New Income Limit €

1 child

480

490

2 children

550

570

3 children

625

655

4 children

720

760

5 children

820

870

6 children

910

970

7 children

1,020

1,090

8 children

1,090

1,170


Income and Other Taxes

Personal Credits increased by €70 for a single person to €1,830 and by €140 for married persons to €3,660.
Employee Tax Credit increased by €70 to €1,830.
Home Carer Tax Credit increased by €130 to €900.
Age Exemption Limits increased from €19,000 to €20,000 for a single person and from €38,000 to €40,000 for married persons.

Standard Rate Bands

Current

New

Single

€34,000

€35,400

Married one income

€43,000

€44,400

Married two incomes

€68,000

€70,800

Other Credits

Current

New

Widowed person

€550

€600

Widowed parent:

Year 1

€3,750

€4,000

Year 2

€3,250

€3,500

Year 3

€2,750

€3,000

Year 4

€2,250

€2,500

Year 5

€1,750

€2,000

Blind Persons:

Single

€1,760

€1,830

Married (both blind)

€3,520

€3,600

Incapacitated Child

€3,000

€3,660

Age Credit:

Single

€275

€325

Married

€550

€650

Health contribution

Health Levy thresholds increased from €480 per week to €500 per week and from €24,960 per annum to €26,000 per annum.

PRSI

As from 1 January 2008, the employee weekly threshold for liability to PRSI will increase from €339 to €352.

As from 1 January 2008, the PRSI contribution ceiling will increase from €48,800 to €50,700.

Mortgage interest relief

The current annual ceiling on the amount of interest that can be allowed on a mortgage is being increased with effect from 1 January 2008 for first-time buyers from €8,000 to €10,000 for a single person and from €16,000 to €20,000 for married people. The additional relief will be available for the first seven years for which there is an entitlement to mortgage interest relief.

Allowance for Rent

The maximum level of rent paid for private rented accommodation on which tax relief can be claimed, at the standard rate of tax, is being increased. For those aged under 55 years of age, it is being increased from €1,800 to €2,000 per annum for a single person and from €3,600 to €4,000 per annum for widowed and married people. This equates to a tax credit of €400 per annum for single people and €800 for widowed and married people under 55 years of age.

For those aged 55 years and over, the maximum level of rent paid on which tax relief can be claimed is being increased from €3,600 to €4,000 per annum for a single person and from €7,200 to €8,000 per annum for widowed and married people. This equates to a tax credit of €800 per annum for a single person and €1,600 per annum for widowed and married people over 55 years of age.

Rent-a-Room Scheme

The limit of the exemption from income tax which applies to rent received, where a person rents out a room or rooms in their principal private residence, is to be increased from €7,620 to €10,000.

Tax Relief on Trade Union Subscriptions

The standard-rated tax allowance in respect of subscriptions paid by members of trade unions is to be increased from €300 to €350 per annum. This is equivalent to a tax credit of €70 per annum.

Increase in the Specified Rates for Preferential Home Loans and Other Loans

An employee who gets a preferential loan through their employer is charged income tax on the difference between the interest actually paid and the amount which would have been payable at the ''specified'' rates of interest for the loans. To reflect increases in interest rates, the specified rate in respect of home loans is being increased from 4.5% to 5.5 % and the specified rate in respect of other loans is being increased from 12% to 13%. These changes will take effect from 1 January 2008.

Tax relief on medical expenses

There are new provisions about tax relief on certain medical expenses, contained in Section 9 of the Finance Act 2007, but only coming into effect at a practical level now.

Up to 2007, the first €125 of certain health expenses in the claim year was disallowed and didn't qualify for relief. With a claim for a family or other dependents the first €250 of expenses incurred in that year was disallowed.

These thresholds have been abolished for tax year 2007. You can now claim tax relief at your marginal rate on medical expenses incurred during 2007.

Furthermore, the provision that there is a defined relationship between the taxpayer and the subject of the tax relief claim is being abolished in relation to health expenses relief from 2007 onwards. Up to now, you could only claim tax relief on expenses incurred by certain people (spouses, child dependents, among others).

EU Tax Issue

Following discussions with the European Commission, the tax treatment of investment income and income attributable to the exercise of foreign employments outside the State will extend to UK-sourced income. The Finance Bill will extend the relevant treatment from 1 January 2008.

VAT

VAT Registration Thresholds for SMEs

The VAT registration thresholds for small businesses are being increased from €35,000 to €37,500 in the case of services, and from €70,000 to €75,000 in the case of goods. These increases will take effect from 1 May 2008.

Review of VAT on Property Transactions

A review of the current system of applying VAT on property transactions has been carried out. Provision will be made in the Finance Bill for the introduction of a new system for applying VAT to property transactions. The changes are designed to simplify the rules for VAT on property, while ensuring a more equitable treatment for taxpayers. The new rules will apply to both commercial and residential property supplied in the course of business. The VAT charge on sales of residential property is unchanged.

The new system will take effect from 1 July 2008.

Vehicle Registration Tax

The current VRT system uses engine size as the criterion to determine the VRT rate to be applied to a car. Under the revised VRT system the CO2 emissions of a car will replace engine size as the criterion to determine the VRT rate payable on the car at point of registration. Lower emission cars will attract reduced VRT rates and higher emission cars will be liable to higher rates. The VRT rates will continue to be applied to the Open Market Selling Price of the car. The revised VRT system will take effect on 1 July 2008.

The following Table sets out the CO2 Emission Bands and the relevant VRT rates under the revised VRT system.

CO2 Emissions Bands

CO2 Emissions Bands

g CO2/km

VRT Rates

A

0 - 120g

14%

B

121 - 140g

16%

C

141 - 155g

20%

D

156 - 170g

24%

E

171 - 190 g

28%

F

191 - 225g

32%

G

226g and over

36%

Vehicle Registration Tax (VRT) Relief Scheme for Hybrid Electric and Flexible Fuel Vehicles and VRT exemption for Electric Vehicles.

The existing 50% VRT relief scheme for series production hybrid electric vehicles and flexible fuel vehicles expires on 31 December 2007. The scheme is being extended in its current form from 1 January 2008 until 30 June 2008, at which point the revised VRT scheme based on CO2 emissions will be implemented. From 1 July 2008 the relief for series production hybrid electric and flexible fuel cars will be adjusted to provide a relief of up to €2,500 on the VRT payable, in addition to the benefit of the new VRT CO2 emission related system. This relief will apply until 31 December 2010.

Series production electric cars (i.e. cars which can be propelled solely by a rechargeable battery) and electric/battery-assisted bicycles are being exempted from VRT with effect from 1 January 2008.

Tobacco Excise

The Excise Duty on a packet of 20 cigarettes is being increased by 30 cents (including VAT) with a pro-rata increase on other tobacco products, with effect from midnight on 5 December 2007.

Farmer taxation

Flat rate addition

The farmer's flat rate addition is being maintained at 5.2% for 2008.

Dissolution of farm partnerships

A new relief from Capital Gains Tax on the dissolution of farm partnerships will be introduced in the Finance Bill. The relief will run for a period of 5 years and full details will be contained in the Finance Bill.

Milk Production Partnerships

Where a farmer on income averaging enters a milk production partnership the provisions that can result in a clawback of income tax will no longer apply.

Stamp Duty

Reform of stamp duty on Residential Property

The current Stamp Duty system applicable to residential property is being reformed.

A simplified system, incorporating an exemption of €125,000 with 2 progressive rates instead of the existing 6 rate bands, is being introduced with immediate effect (5 December 2007).

Transactions not exceeding the €125,000 exemption level will not be liable to stamp duty. For amounts above this €125,000 exemption level, but not exceeding €1 million, stamp duty will be charged at 7% on the excess over €125,000. Where the property exceeds €1 million, the part in excess of €1 million will be charged at 9% with the remainder between €125,000 and €1 million subject to a 7% charge.

In addition, properties with a value in excess of €125,000 but not exceeding €127,000 will not be liable for stamp duty.

This change will take effect in respect of instruments which are required to be presented to the Revenue Commissioners for stamping no later than 5 December 2007. Instruments which are executed in the 30 days prior to 5 December 2007 will therefore benefit from this change.

Current exemptions in relation to first time buyers and buyers of new homes will continue to apply.

Claw-back of relief for first-time purchasers and other owner-occupiers

An exemption from stamp duty is generally available for first-time owner-occupying purchasers of new or second-hand dwelling houses or apartments. There is also an exemption available for other owner-occupying purchasers of new dwelling houses or apartments under 125 square metres. In addition, partial relief is also available to owner-occupying purchasers of new dwelling houses or apartments over 125 square metres. These exemptions/reliefs are clawed-back where the purchaser rents out the dwelling house or apartment, other than under rent-a-room arrangements, within 5 years of the date of the deed of transfer giving effect to the purchase.

This claw-back period is being reduced for all three reliefs from 5 to 2 years for deeds of transfer executed on, or after, 5 December 2007. For deeds of transfer executed before 5 December 2007, to the extent that a dwelling house or apartment is rented out on or after 5 December 2007, it will not involve a claw-back of relief where this happens in the third, fourth or fifth year of ownership.

Financial Cards

Changes are being made to the stamp duties applicable to ATM/Debit cards, charge cards and credit card accounts. The rate changes are summarised as follows:

Description

Current

New

Charge cards and credit card accounts

€40

€30

ATM cards

€10

€5

Debit cards

€10

€5

Combined ATM/Debit cards

€20

€10

The charges for ATM/Debit/Combined cards will take effect on the year ending 31 December 2007 and for credit cards for the year ending 1 April 2008.

Cheques

The stamp duty rate on Bills of Exchange is being increased from 15 cent to 30 cent in respect of cheques and other Bills of Exchange drawn on, or after, 6 December 2007. In the case of cheques, the increase will apply in respect of cheques supplied by financial institutions to customers on, or after, 6 December 2007.

Increase in site to child exemption

The existing Site to Child relief from stamp duty and Capital Gains Tax provides an exemption under both taxes on sites with a market value not exceeding €254,000, where a parent transfers the site to a child for the purposes of constructing the child's principal private residence. The exemption threshold of €254,000 is being increased to €500,000. This change will take effect in respect of disposals made on or after Budget day (5 December 2007).

Since 2007 the area of the site must be less than 1 acre (0.4047 hectare) exclusive of the area occupied by the house itself.

Health

The Government is providing nearly €16.2 billion for health services in 2008. Specifically, an additional €276 million over the pre-Budget estimate is being provided for a range of health developments, including cancer care, older people, people with disabilities and children. Details of these developments will be announced by the Minister for Health and Children.

This year, an additional €135m is being provided for the introduction in 2008 of the new long term residential care scheme, A Fair Deal, (€110m) and €25m for complementary community support services for older people and for Palliative Care;

The additional package of €25m now being provided for community initiatives includes,

  • 350 extra home care packages, which should benefit over 1,000 people to remain at home or to return home after a period in hospital - €10m
  • 216,000 extra home help hours - €5m
  • 1,100 extra Day/Respite places nationally - €3.6m
  • Enhanced supports at national level for voluntary groups working on delivering services in partnership with the HSE - €2m
  • Improved service provision for Palliative Care - €3m.

Disability

The 2008 Budget will provide an additional €50 million to develop further key services for people with a disability. The type of services to be funded in 2008 will include:

Intellectual Disability and Autism

  • 255 new residential places
  • 85 new respite places
  • 535 new day service places

Physical and Sensory disabilities

  • 80 new residential places
  • 250,000 extra personal assistance/home support hours

Disability and health payments

Since 1 January 2008, the Domiciliary Care Allowance rate is €299.60 per month. From June 2008 the annual Respite Care Grant is €1,700 if you are caring for one child and €3,400 if you are caring for two or more children.

Infectious Diseases Maintenence Allowance (IDMA) 2008 rates
Personal circumstances Maximum weekly rate Reduction
Single/Widow(er) €197.80 Reduced to €151.60 if you are receiving in-patient public hospital services
Person with dependant spouse €329.10 Reduced to €299.30 if you or your spouse are receiving in-patient public hospital services or €252.90 if both are.
Child dependants €24 euro each, or €77 each if child is over 16 N/A
Payment towards employing a helper €97 or actual wage paid, whichever is the lesser N/A
Payment towards meeting cost of rent/mortgage €51.10 , or cost of outgoings whichever is the lesser N/A


Blind Welfare Allowance 2008 rates
Single person €61.60 per week
Blind couple €123.20 per week
Each child dependant €4.40 per week


The Blind Welfare Allowance rate for a couple is only applicable where both applicant and partner/spouse are qualified.

Blind Welfare Allowance for a Disability Allowance recipient aged between 16 and 18 years is €7.50 per week in respect of adult dependant; and €3.90 per week in respect of a child dependant.

Mobility Allowance, 2008 rates
High rate Low rate
€202 per month €101 per month

Since 1 January 2008 the maximum Motorised Transport Grant is €5,020.50

Medical Cards

The Department of Health and Children are currently carrying out a review of the eligibility criteria for medical cards. This review is expected to be completed by autumn 2008. The Government is committed to making progress concerning medical cards in line with pledges outlined in the Programme for Government.

Nursing home charges

It is understood that the new nursing home payment scheme, 'A Fair Deal', will not come into effect on 1 January 2008 as planned. It is likely to be implemented later in 2008.

Drugs Task Forces

A total of €12.5 million is being allocated to implement the recommendations of the National Drug Strategy Rehabilitation Report which will allow for the strengthening of local Drugs Task Forces and the roll out of services to new commuter-belt towns.

Hospital and other health charges

All changes are effective from 1 January 2008.

  • The maximum an individual or family pays for approved prescribed drugs and medicines in a month will be €90 per month, increased from €85.
  • In-patient charge increases from €60 to €66 a day, up to a maximum of €660 in any 12 month period.
  • The Accident & Emergency statutory charge increases from €60 to €66 per visit.

In-patient and day- care rates will increase by 10%. The new rates (effective 1 January, 2008) are:

Hospital Category Private Semi-private Day-care
HSE Regional Hospitals and Voluntary and Joint Board Teaching Hospitals 758 euro 594 euro 546 euro
HSE County Hospitals and Voluntary Non-teaching Hospitals 506 euro 407 euro 362 euro
HSE District Hospitals 217 euro 185 euro 161 euro

Public health measures

From midnight 5 December 2007 the price of a pack of 20 cigarettes will increase by 30 cent (including VAT). Other tobacco products will also increase pro-rata from that date.

A study is to be conducted into the public health benefits of a switch to lower alcohol beverages. Measures will be introduced in Budget 2009 in this area.

Housing, Education, Employment

Housing

Stamp duty on residential property

A new simplified system of stamp duty is introduced with effect from 5 December 2007. It will also apply to instruments executed in the 30 days before that date.

The first €125,000 of a residential property transaction will be exempt from stamp duty.

Properties over €125,000 but under €1 million will be charged stamp duty of 7% on the excess over €125,000.

Properties over €1 million will be charged stamp duty of 9% on the excess over €1 million and 7% on the remainder between €125,000 and €1 million.

Properties with a value of more than €125,000 but not exceeding €127,000 will not be liable for stamp duty

The current exemptions for first-time buyers and buyers of new homes still apply.

Clawback of stamp duty

The exemption from stamp duty for first-time house buyers and buyers of certain
new homes is currently clawed back if the purchaser rents out the home within 5 years of date of purchase. This clawback period is being reduced to 2 years for all deeds of transfer executed on or after 5 January 2007.

For deeds of transfer executed before 5 December 2007, if that house or apartment is rented out on or after 5 December 2007, it will not involve a claw-back of relief where this happens in the third, fourth or fifth year of ownership.

Mortgage interest relief

From 1 January 2008 the annual ceiling on mortgage interest that can be allowed is being increased for first-time buyers from €8,000 to €10,000 for single people and from €16,000 to €20,000 for married people. The additional relief is available for the first 7 years of the entitlement to mortgage interest relief.

Rent relief

The maximum annual level of rent that can be claimed as tax relief is being increased for those aged under 55 to €2,000 for single people and €4,000 for widowed or married people. For those aged over 55 the levels are increased to €4,000 for single people and €8,000 for widowed or married people.

Rent-a-Room relief

The exemption limit from income tax under the Rent-a-Room scheme is to be increased from €7,600 to €10,000

Additional funding for housing

  • €124 million for social housing, as part of NDP and Towards 2016 targets on 27,000 social housing starts in 2007-2009
  • €27 million for the Rental Accommodation Scheme to meet carryover and new commitments in 2008, reflecting the transfer from the Department of Social and Family Affairs of customers previously in receipt of Supplementary Welfare Allowance
  • €50 million for the Affordable Housing Scheme
  • €25 million for the Capital Loans and Subsidy Scheme (Voluntary and Co-operative Housing)

Education

Primary schools

An additional €95.2 million in capital funding is being allocated to the Primary School Building Programme to provide an additional 13,000 school places in rapidly developing and other areas.

School transport costs

Primary Schools

Charges have increased for those who do not qualify for the free service to €36 per term from Easter 2008.

Secondary schools

The charge for Junior Certificate students increases to €46 and that for Leaving Certificate students to €71, both from Easter 2008.

Special educational needs

An additional €18 million to cover extra Special Needs Assistants and expansion of post-primary services.

Back to Education

The Cost of Education Allowance will increase by €100 to €500 per year and will be extended to Back to Education credit only cases (academic year 2008).

Social inclusion

€3 million in social inclusion measures providing 500 extra adult literacy places, 100 extra Youthreach places and 500 extra places under the Back to Education Initiative

Educational disadvantage

An additional €25 million in Dormants Accounts Funding to be used for measures aimed at tacking educational disadvantage

Other funding

Other additional funding includes:

  • €23.3 million for non-pay costs and other services in schools
  • €21 million for school transport
  • €26 million for temporary accommodation in schools
  • €2 million to extend the Schools Meals Scheme to more schools in the Delivering Equality of Opportunity in Schools Initiative
  • €12 million for research in third-level institutions to progress the Strategy for Science, Technology and Innovation

Back to School Allowance

From June 2008 the Back to School Clothing and Footwear Allowance will increase by €20 to €200 for each child aged 2-11 years and by €20 for each child aged 12-22 years.

Employment and training

The employee tax credit is increased by €70 to €1830.

PRSI

The employee annual ceiling for PRSI contributions will increase from €48,800 to €50,700.
The employee weekly PRSI threshold will increase from €339 to €352.

Trade union dues

The annual tax allowance at standard rate for trade union subscriptions is to be increased from €300 to €350. This is equivalent to a tax credit of €70 per year.

Training

Additional €7 million is allocated to the National Training Fund to support the National Skills Strategy focusing on upskilling the workforce.

FÁS payments 2008

Community Employment
Category of Participant Rate
Participant without dependants €222.20
Participant with adult dependant €353.50 maximum
Each child dependant (full rate) €24.00
Each child dependant (half rate) €12.00

FAS Training Allowances 2008
Age Rate per week(full-time)

Part-time rates (20 hours per week)

Between 15 and 16 years €80.60
€46.40
17 years €100.70 €58.00
18 years and over €197.80 €113.85

From January 2008 the minimum payment for a Job Initiative participant will increase from €420.40 to €444.40.

Migrant communities

€4 million for the Office of the Minister of State for Integration to support programmes addressing the needs of migrant communities

Environment

Environment

Motor tax


From 1 February 2008, motor tax rates are being increased by 9.5% for cars below 2.5 litres and 11% for larger cars. Motor tax on goods and all other vehicles (except electric vehicles) will also increase by 9.5%. Fees for trade plate licences will also increase by 9.5%. These new rates apply to motor tax discs and trade licences taken out for periods on or after 1 February 2008.

Motor tax for new and imported vehicles from July 2008

For new cars and pre-owned imports registered from 1 July 2008, motor tax charges will be determined on the basis of seven CO2 bands. Charges will range from €100 a year for the greenest cars to €2,000 for cars with the highest emissions ratings.



Motor tax rates for new cars from 1 July 2008
Band
CO2 Emissions per kilometre
Motor Tax Rate €
A under 120grams 100
B between 121 and 140 grams 150
C between 141 and 155 grams 290
D between 156 and 170 grams 430
E between 171 and 190grams 600
F between 191 and 225 grams 1,000
G over 225grams per kilometre 2,000



































Existing cars will continue to be taxed on the current basis of engine size.

CO2 emissions and Vehicle Registration Tax (VRT)


Under a revised Vehicle Registration Tax (VRT) system the CO2 emissions of a car will replace engine size as the criterion to determine the VRT rate payable on the car at point of registration. Lower emission cars will attract reduced VRT rates and higher emission cars will be liable to higher rates. The VRT rates will continue to be applied to the Open Market Selling Price of the car. The revised VRT system will take effect on 1 July 2008.




CO2 Emission Bands and the relevant VRT rates

CO2 Emissions Bands


g CO2/km


VRT Rates


A


0 - 120g


14%


B


121 - 140g


16%


C


141 - 155g


20%


D


156 - 170g


24%


E


171 - 190 g


28%


F


191 - 225g


32%


G


226g and over


36%




Hybrid electric vehicles and flexible fuel vehicles


The existing 50% VRT relief scheme for series production hybrid electric vehicles and flexible fuel vehicles is being extended in its current form from 1 January 2008 until 30 June 2008, at which point the revised VRT scheme based on CO2 emissions will be implemented.

From 1 July 2008 the relief for series production hybrid electric and flexible fuel cars will be adjusted to provide a relief of up to €2,500 on the VRT payable, in addition to the benefit of the new VRT CO2 emission related system. This relief will apply until 31 December 2010.

Series production electric cars (i.e. cars which can be propelled solely by a rechargeable battery) and electric/battery-assisted bicycles are being exempted from VRT with effect from 1 January 2008.

Car leasing


A revised scheme of capital allowances and leasing expenses for cars used for business purposes is being introduced. Cars will be categorised by reference to CO2 emissions with the emissions bands being broadly consistent with the new VRT system, as follows:

  • Cars with CO2 emission levels in Category A/B/C above will benefit from capital allowances at the current car value threshold under the existing scheme of €24,000, regardless of the cost of the car. Cars in Category D/E will receive allowances of 50% of the current car value threshold or 50% of the cost of the car, if lower. Cars in Category F/G will not qualify for capital allowances.
  • As regards leasing expenses, cars in Category A/B/C will benefit from a proportionately higher deduction than the actual leasing expenses where the cost of the car is less than €24,000. Cars in Category D/E will get 50% of the leasing expenses they would otherwise benefit from under the current scheme. Cars in Category F/G will not qualify for a deduction for leasing expenses.

The revised scheme will come into effect in respect of cars purchased or leased on or after 1 July 2008.

Lighting


Minimum energy efficiency standards for lighting will be introduced from 2009. The standards will result in an effective ban on the sale of the most inefficient traditional light bulbs.

Legislation will be prepared by the Department of the Environment next year setting a general energy efficiency standard of 25 lumens per watt. As part of preparation of the legislation, there will be consultation with all stakeholders to ensure the measures can be effectively implemented.

Environmental protection


There is an additional €13 million for the Environment Protection Agency (EPA) to go towards essential research and development and monitoring, the cost of construction of an extension to the EPA headquarters in Wexford and staffing. This brings the total allocation to over €39 million for 2008.

There is an additional €8 million for National Heritage (National Parks and Wildlife) to go towards the management and consolidation of National Parks properties and the cost of monitoring and management programmes as required under the various EU Habitats and Birds Directives.

There an additional €3 million for landfill remediation, bringing the total allocation to €13.5 million in 2008.

An extra €4 million current funding is being provided for payments under the Salmon Hardship Scheme and €2.8 million current funding is being provided to Inland Fisheries Boards for their role in the implementation of the Water Framework Directive.

A further €35 million has been allocated to meet increased demand under the Farm Waste Management Scheme, to facilitate compliance with environmental conditions and standards required by the EU Nitrates Directives.

An additional €10 million is allocated for an enhanced fishing vessel decommissioning scheme, with a view to achieving a more appropriate balance between fishing capacity and stocks. The scheme involves a package of aid to encourage a reduction of some 35% in the Irish Whitefish Fleet, which is essential for the development of a sustainable seafood industry.

An additional €18 million is being allocated for the Office of Public Works for flood relief projects in a number of locations throughout the country.

Water services


An additional €45 million will be invested in water services in 2008 to continue infrastructural support for social and economic development.

Energy conservation


Capital funding of €13 million will go towards energy conservation, for insulation, efficiency and building rating schemes and for a range of initiatives which will promote new technologies, increase awareness of energy efficiency and improve capacity to deliver in this area.

There is an allocation of €7 million capital funding to energy research which will mainly fund measures to develop renewable energy from ocean sources.

The VAT rate on the supply of elephant grass rhizomes, seeds, bulbs, roots and similar supplies used for the agricultural production of bio-fuels will be reduced from 21% to 13.5% with effect from 1 March 2008.
Page updated: 9 December 2009

Related Documents

  • Budget 2007
    Budget 2007 was announced on 6 December 2006. Summary of the main changes.
  • Budget 2009
    Budget 2009 was announced on 14 October 2008. Summary of the main changes.
  • Budget 2011
    Budget 2011 was announced on 7 December 2010. Summary of the main changes.

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