Budget 2023

September 27, 2022

 

Budget 2023 has been unveiled by Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath.

This guide provides a high-level overview of Budget 2023. It aims to explain how money will be raised and spent in 2023.

Taxation

Income Tax
– An increase of €3,200 in the income tax standard rate cut-off point for all earners, from €36,800 to €40,000 for single individuals (worth €640) and from €45,800 to €49,000 for married couples / civil partners with one earner.
– An increase of €75 in the Personal Tax Credit, Employee Tax Credit and Earned Income Tax Credit from €1,700 to €1,775.
– An increase of €100 in the Home Carer Tax Credit from €1,600 to €1,700.

USC
– An increase of €1,625 to the 2% rate band ceiling from €21,295 to €22,920
– The reduced rate of USC concession for medical card holders is being extended for a further year.

Small Benefit Exemption
– An increase in the limit to €1,000 and an increase in the number of benefits in a year that an employer can give from one to two per year.

Rent tax credit
– Introduce a new €500 tax credit for private tenants who are not in receipt of other State housing supports. The credit will be claimable “in year” in 2023 and in subsequent years and from early in 2023 in respect of rent paid in 2022.

Help to Buy
– Extension of Help to Buy (HTB) to 31 December 2024.

Sea-going Naval Personnel Tax Credit
Extension of the Sea-going Naval Personnel Tax Credit to 31 December 2023.

Slurry Storage Facilities
– Accelerated capital allowances for the construction of slurry storage facilities so that 50% of expenditure is claimed over two years.

Foreign Earnings Deduction
– Extension of Foreign Earnings Deduction (FED) to 31 December 2025.

Key Employee Engagement Programme
– Extension of Key Employee Engagement Programme (KEEP) to 31 December 2025, facilitating the buy-back of KEEP shares by the issuing company and increasing the company limit to €6 million.

Special Assignee Relief Programme (SARP)
– Extension of Special Assignee Relief Programme (SARP) to 31 December 2025 and increasing the minimum income limit for new entrants to €100,000.

Section 481 Film Relief
– Finance Bill 2022 will extend Section 481 from its current end date of 31 December 2024 to 31 December 2028.

Research and Development Tax Credit
– Finance Bill 2022 will introduce changes to the payment provisions for the R&D tax credit, to align with new international definitions of refundable tax credits.

Knowledge Development Box (KDB)
– Finance Bill 2022 will extend the sunset clause of the KDB for 4 years, to accounting periods commencing before 1 January 2027. The KDB will have a new effective rate of 10%, to come into effect from a date to be set by commencement order.

Young Trained Farmer (Stamp Duty) Relief
– Extension to 31 December 2025.

Farm Consolidation (Stamp Duty) Relief
– Extension to 31 December 2025.

Farm Restructuring (Capital Gains Tax) Relief
– Extension to 31 December 2025.

Stock reliefs
– Extension of the Young Trained Farmer and Registered Farm Partnerships stock reliefs to 31 December 2024.

Living City Initiative
– Extension of the Living City Initiative (LCI) to 31 December 2027, acceleration of relief for owner-occupiers so that it can be claimed as a deduction from total income of 15% of the total eligible expenditure in each of the first six years and 10% for the seventh year and carry forward of relief for owner-occupiers.

Pre-letting Expenses
– Increase eligible expenditure limit for pre-letting expenses for landlords to €10,000 and halve the vacancy period to six months.

Vacant Homes Tax
– A Vacant Homes Tax (VHT) will be introduced in 2023. The tax will apply to residential properties which are occupied for less than thirty days in a twelve month period.
– Extension of Residential Development Stamp Duty Refund Scheme to end-2025.

Defective Concrete products Levy
– New levy of 10% on certain concrete products at point of first supply.

Carbon Tax
– The Carbon Tax rate will increase from the current rate of €41 to €48.50 per tonne of CO2. This will apply to auto fuels with effect from 12 October 2022 and all other fuels from 1 May 2023.

Social Welfare

Health

  • all inpatient hospital charges will be abolished
  • GP visit cards will be provided to those on or below the median income (430,000 additional people)
  • there will be a €2 increase in the weekly rate for a Qualified Child
  • the Drug Payment Scheme threshold will remain at the lower rate of €80 in 2023
  • €10mil in funding will be provided to provide access to IVF treatments
  • free contraception will be available for all women aged between 16 and 30
  • additional emergency placements in mental health facilities

Childcare and Education

  • there will be a Free School Book Scheme for primary school pupils from autumn 2023
  • over 660 additional mainstream teachers, over 1,190 SNAs and 680 special education teachers will be provided
  • 25% reduction in average weekly childcare fees worth up to €2,100 per year
  • the National Childcare Scheme hourly subsidy is to increase from 50c to €1.40
  • there will be a €500 increase in post-graduate contribution grant for eligible families
  • over 4,800 additional places on craft and consortia-led apprenticeships and 4,000 places on craft apprenticeship programmes will be supported
  • reduction in primary school Pupil-Teacher ratio to a level of 23:1

Housing

  • funding will be made available to support 8,800 new HAP tenancies and 800 RAS tenancies
  • 9,100 new-build social homes, 5,500 new affordable homes for sale and rent and 6,500 new social homes will be supported
  • funding to deliver 37,000 home energy upgrades

Other measures

  • 1,000 new Garda and 430 Garda staff will be provided
  • the 20% fare reduction on public transport will be extended to the end of 2023
  • a €1.2 billion package of supports for businesses hit by soaring energy costs
  • 3 x €200 electricity credit for all households