Budget 2019: The Tax Highlights

Budget 2019, Ireland Comments Off on Budget 2019: The Tax Highlights

Finance Minister Paschal Donohoe has just announced Budget 2019. Here are the main tax highlights.

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  • 100% mortgage interest deduction against taxable residential rental income is being restored from 1 January 2019. – A huge mistake that took 9 years to correct, and helped cause a disastrous housing crisis.
  • No change to Local Property Tax.
  • Excise Duty on cigarettes rises by 50c on a pack of 20. – The hardy annual.
  • The Key Employee Engagement Programme for SME’s is being extended, with new ceilings of 100% of salary and the overall value of options up to €300,000.
  • A new 12.5% exit tax will apply on any unrealised gains arising where a company moves or transfers assets offshore to avoid Irish taxation.
  • The 9% VAT rate on tourism & hospitality enterprises is being scrapped and 13.5% VAT will apply from 1 January.
  • The VAT rate on newspapers is to remain at 9%. Government doesn’t dare hand the media a tax hike?
  • The 9% VAT rate will continue on sporting facilities.
  • The threshold for Capital Acquisitions Tax on transfers between parents and children rises from €310,000 to €320,000. So small to be almost meaningless. And no mention of any improvement to the pathetically low thresholds for transfers from uncles, aunts, siblings or grandparents.
  • Betting tax goes from 1% to 2%
  • An increase in Vehicle Registration Tax (VRT) with a new 1% surcharge for diesel vehicles. Two fingers to the EU Single Market 
  • Farmers Stock Relief and Young Trained Farmer Stamp Duty Relief each extended for 3 years.
  • Farm Income Averaging extended to farmers with off-farm income. Long overdue.
  • The Income Tax standard rate cutoff point goes up from €34,550 to €35,300 for a single worker.
  • The 4.75% USC rate is cut to 4.5%.
  • The new €9.80 minimum wage per hour will remain outside the second USC rate.
  • Home Carer Tax Credit goes up by €300 to €1,500
  • The Earned Income Tax Credit for the self-employed and company directors goes up by €200 to €1,350. The equivalent credit for employees remains at €1,650. Equality?