This Budget Summary only contains details of the relevant tax changes, it does not include details of Social Welfare changes
INCOME LEVY
The rates of the Income Levy have changed with effect from 1 May 2009, as illustrated below:
Applicable from 1 May 2009
| Income Levy Thresholds |
| Rate |
| Income up to €75,036 |
2% |
| Income from €75,037 to €174,980 |
4% |
| Income above €174,980 |
6% |
|
Rates prior to this are shown below:
Applicable from 1 January 2009 to 30 April 2009
| Income Levy Thresholds |
| Rate |
| Income up to €100,100 |
1% |
| Income from €100,101 to €250,120 |
2% |
| Income above €250,120 |
3% |
|
The under 65 income levy exemption will change from €18,304 to €15,028 from 1 May 2009.
PRSI
PRSI Rates
With effect from 1 May 2009 all PRSI rates are increased by 0.5%.
Employee’s PRSI Annual Earnings Ceiling
The PRSI contribution ceiling will increase from €52,000 to €75,036 from 1 May 2009.
HEALTH LEVY
Health Levy Rates
With effect from 1 May 2009 the Health Levy rates will increase from 2% to 4% and from 2.5% to 5%.
Health Levy Threshold
The Health Levy threshold will decrease from €100,100 to €75,036 from 1 May 2009.
MORTGAGE INTEREST
Tax Relief at Source—Mortgage Interest Relief
From 1 May 2009, tax relief may not be claimed on the interest paid on a qualifying home loan in the 8th and subsequent tax years of the life of that loan. All qualifying loans taken out in the 2002 tax year or earlier tax years are in this category.
However, mortgage interest tax relief may be claimed on the interest paid on a qualifying home loan in the first 7 tax years of the life of that loan.
The current rates of tax relief for first time buyers and non-first time buyers remain unchanged.
There is no change to the existing annual ceilings on the amount of interest that can be allowed on a mortgage:
| Description |
Single |
Married |
| First-time buyers |
€10,000 |
€20,000 |
| Non first-time buyers |
€3,000 |
€6,000 |
|
Restriction of Interest Relief on Borrowings for the Purchase of Rented Residential Properties
Interest accruing on or after 7 April 2009 on borrowings used in the purchase of rented residential property will now be restricted so that only 75% of that interest can be set off as an expense against rental income.
Interest on a loan used for the improvement or repair of rented residential property is unaffected. The interest on such borrowings can still be deducted as an expense in full.
Where a loan is used to purchase a mixed commercial/residential property the interest on the money borrowed must be apportioned between the part of the borrowings used to acquire the commercial part of the property and the part used to acquire the residential part of the property.
In the case of interest on a “mixed” loan used to purchase, improve or repair a rented residential property, only the interest accruing on that part of the loan used to purchase the property is affected by the restriction.
Interest on borrowings used to acquire foreign rented residential property is restricted from 7 April in the same way in arriving at foreign rental income.
The “rent-a-room” relief is unaffected.
DIRT
Deposit Interest Retention Tax (DIRT) and Tax Rates on Life Assurance Policies and Investment Funds
The rates of retention tax that apply to deposit interest, together with the rates of tax that apply to a) life assurance policies and b) investment funds, are being increased by 2 percentage points to 25% and 28% respectively. The increased rates will apply to payments including deemed payments, made on or after 8 April 2009. Full details in relation to DIRT will be included in the Finance Bill.
CAPITAL GAINS TAX
Change in rate of Tax
The rate of capital gains tax is being increased to 25% from 22% in respect of disposals made from midnight on 7 April 2009.
CAPITAL ACQUISITIONS TAX
The new group thresholds that will apply to gifts and inheritances taken on or after 8 April 2009 will be as follows:
| Group |
Relationship to Disponer |
Group Threshold from 1 January 2009 to 7 April 2009 |
Group Threshold from 8 April 2009 |
| A |
Son/Daughter |
€542,544 |
€434,000 |
| B |
Parent/Brother/
Sister/Niece/Nephew/Grandchild |
€54,254 |
€43,400 |
| C |
Relationship other than Group A or B |
€27,127 |
€21,700 |
|
The rate of tax on gifts and inheritances taken on or after 8 April 2009 is increased from 22% to 25%.
EXCISE
Increase in Mineral Oil Tax on Auto-Diesel
The mineral oil tax on auto-diesel will be increased by 5 cent per litre (including VAT) with effect from midnight on 7 April 2009. The same increased rate will apply to jet kerosene for non-business use, and to diesel used for private pleasure navigation.
Tobacco Excise
The excise duty on a packet of 20 cigarettes is being increased by 25 cent (including VAT) with a pro-rata increase on other tobacco products with effect from midnight on 7 April 2009.
STAMP DUTY
Life Assurance Policies
A new levy on life assurance is being introduced at the rate of 1%. This new levy will apply to premiums received by an insurer on or after 1 June 2009.
Non-Life Insurance Policies
The current non-life insurance levy of 2% is being increased by 1%. The new rate of 3% will apply to premiums received by an insurer on or after 1 June 2009 for renewals and offers of insurance issued by an insurer on or after 8 April 2009.
“Trade-in” Scheme
A “trade-in” scheme is being introduced which will provide for an exemption from stamp duty on the transfer of an existing house/apartment in exchange or part exchange for a new house/apartment. The Finance Bill 2009 will contain full details of the scheme.
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