Budget 2013- How it affects you

 

Property Tax

  •  Mortgage interest relief to end on 31 December 2012 as planned
  • NPPR charge to cease from 1 January 2014
  • The household charge will cease to have effect from 1 January 2013
  • Property tax on residential properties to be introduced from 1 July 2013.   Points to note are
    • The property tax will be collected by the Revenue Commissioners. 
    • Revenue will publish a valuation guidance document in due course
    • The owner can seek to get their own valuation
    • The initial valuation will be valid up to and including 2016. 
    • The tax will be levied at 0.18% for the first €1,000,000 and 0.25% thereafter. Properties with a value of more than €100,000 and less than €1,000,000 will be assessed at the mid-point of valuation bands of €50,000 width.
    • Properties valued in excess of €1,000,000 will be liable at 0.18% on the first €1,000,000 with no banding applied
    • Rates to remain unchanged for lifetime of government.
    • Voluntary deferral will be available for property tax for low income earners.  Interest will be charged on deferred amounts at a low rate.
    • Exemption from local property taxes for any new or previously unoccupied homes acquired before 31 December 2016. Relief will also apply to first time buyers and residents in unfinished estates during this period.

 Farming Community

 

  • The definition of registered farm partnerships is to be widened to add other production partnerships.  Qualifying young trained farmers in such partnerships can continue to avail of the 100% stock relief.
  •  General 25% rate and the special 100% rate of stock relief, which were due to expire on 31 December 2012 extended by three years to 2015.
  • The farmer’s flat rate addition will be reduced from 5.2% to 4.8% with effect from 1 January 2013.
  • Relief from CGT for disposals of farm land for farm restructuring from January 2013 to December 2015 this is subject to EU State Aid approval.

 Business Owners, Enterprise

  •  VAT rate for tourist industry to remain at 9% for 2013
  • Launch of 10 year venture capital fund to fund new and expanding companies.
  • Commitment to maintain the 12.5% rate of corporation tax

 

CAT & CGT

 

  • 10% decrease in CAT thresholds.    Therefore

                   Class A (child/foster child)                       €225,000

                  Class B  (lineal ancestor or descendant       € 30,150

                  brother, sister, child of brother or sister)

                   Class C          (others)                            € 15,075

  •  CAT and CGT rates to increase by 3% (to 33%) from midnight tonight.

 Income Tax & Pension Reliefs

 

  • Income Tax rates, bands and credits to remain unchanged.
  • Tax deduction on charitable donations available at 31% blended rate of income tax for 2013
  • PRSI extended to cover “other income” or non earned income such as rental income, dividends, interest income on deposits and savings for self employed from 1 January 2013 and for all other persons from 1 January 2014.
  • Minimum level of annual PRSI contribution by self employed individuals will increase from €253 to €500.
  • Weekly PRSI allowance will be removed for employees.
  • From 1 July 2013 income tax will apply to maternity benefit payments but no USC applicable to maternity benefit payments
  • Top slicing relief on ex-gratia payments and retirement lump sums no longer available on amounts over €200,000 with effect from 1 January 2013
  • AVCs of up to 30% of pension value can be withdrawn but will be taxed at marginal rate of Income Tax. This option will be available for a 3 year period from the date of passing Finance Bill 2013.
  • Tax relief will only be allowable for pension contributions up to a level that provides income of up to €60,000 per annum. This will take effect from 1 January 2014.
  • Tax relief on pension contributions will continue at the marginal rate of income tax.
  • The pension levy will not be renewed after 2014.
  • The farmer’s flat rate addition will be reduced from 5.2% to 4.8% with effect from 1 January 2013.
  • Increase from 12.5% to13.5% in the specified interest rate used in calculating the taxable benefit from preferential loans, other than home loans. The specified rate for home loans will be decreased from 5% to 4%.

 

DIRT Tax VRT etc…

 

  • DIRT increase from 30% to 33%. 
  • VRT and motor tax across all categories will increase from 1 January 2013. A dual registration period will be introduced in order to incentivise a year round market.

The Retired and Elderly  

  • The reduced rate of USC for those over 70 years of age with an income in excess of €60,000 will be discontinued from 1 January 2013 and the standard rates of USC will apply.
  • Individuals over 70 years of age with an income of €600 – €700 per week and couples with an income of €1,200 – €1,400 per week will have their medical card replaced with a GP only card.
  • Top slicing relief on ex-gratia payments and retirement lump sums no longer available on amounts over €200,000 with effect from 1 January 2013
  • Reduction in electricity and telephone allowances.

 

Health Costs/Families

 

  • Drug payments prescription scheme threshold increased from €132 to €144
  • Prescription charge to increase from 50 cents to €1.50. The monthly cap for a family is being increased from €10 to €19.50.
  • Increase in child care places for low income workers
  • Child benefit payments to be reduced by €10 per month
  • Reduction in electricity and telephone allowances.

Social Welfare recipients and low earners

  • Period for jobs seekers benefit to be reduced by 3 months
  • No reduction to primary social welfare rates.
  • Voluntary deferral will be available for property tax for low income earners.  Interest will be charged on deferred amounts at a low rate.
  • Reduction in electricity and telephone allowances

The “old reliables”

  • Excise duty on petrol and diesel is unchanged
  • Excise duty Beer and cider increase of 10c per pint
  • Sprits 10c increase per measure
  • Wine €1 increase per 75cl bottle
  • Cigarettes increase of 10c per pack of 20

 Other points

  • Troika has agreed that proceeds of state asset sales to be used to support investment in infrastructure and job creation
  • Extra funds to be allocated to Department of Jobs Enterprise and Innovation to support job growth and export companies
  • Reduction in public service pay bill and pensions of €1billion during the period 2013-2015

 If you have any enquiries about the contents of this article please contact ewhelan@dgod.ie or telephone 061490400

The data on this blog is provided for informational purposes only and is not intended to be legal advice.  Dermot G. O’Donovan Solicitors makes no representations as to accuracy, correctness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. No solicitor-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of a Solicitor. If you require legal advice, please consult with a Solicitor.

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