The 2023 Budget was presented on Tuesday the 27th of September. This is a little earlier than normal owing to energy inflation and the general increased cost of living. The size of additional spending in the Budget will be close to an unprecedented €11 billion. Our qualified Tax Experts have comprehensively reviewed the Budget and its implications for our clients. We were told the 2023 Budget would be all about putting money back in our pockets, and we have outlined all the changes for you.
An increase of €3,200 in the income tax standard rate band cut-off point for all earners. In everyday terms this equates to a potential annual tax saving of €640 per person.
- Single, widowed or surviving civil partner will see their rate bands increase from €36,800 to €40,000
- Single, widowed or surviving civil partners who qualify for the Single Parent Child Carer Credit will see a rise from €40,800 to €44,000 in their standard rate band
- Married couples or civil partners who have one income between them will benefit from an increase of €45,800 to €49,000 in their rate band
- Married couples or civil partners with two incomes, will benefit from a rise in their rate band from €45,800 to €49,000, with a potential further increase to €31,000 for the lower earner
Employee & Personal Tax Credit
An increase of €75 in the Personal & Employee tax credit will result in a potential tax saving of €150 per person.
- An increase of €75 in the Personal Tax Credit from €1,700 to €1,775
- An increase of €75 in the Employee Tax Credit from €1,700 to €1,775
- An increase of €100 in the Home Carer Tax Credit from €1,600 to €1,700
Universal Social Charge
USC is a tax payable on your total income. Depending on your circumstances, you pay USC at the standard rate or the reduced rate. There will be an increase of €1,625 to the 2% rate band ceiling from €21,295 to €22,920. Incomes up to €13,000 will be exempt from USC, otherwise, from January 2023 USC will be calculated as:
- Income up to €12,012 will pay USC at a 0.5% rate
- Income from €12,013 – €22,920 will pay USC at a 2% rate
- Income from €22,921 – €70,044 will pay USC at 4.5%
- Income over €70,045 will be taxed for USC at a rate of 8%
- And those self-employed earning over €100,000 will be hit with a 3% surcharge
Rent Tax Credit
With the previous abolishment of the rental tax credit, the 2023 Budget saw it welcomed back with open arms. A new €500 tax credit will be introduced for private tenants who are not in receipt of other state housing supports. The credit will apply for years 2022-2025. The 2022 credit can be claimed in early 2023.
Any parent that pays the rent of a child living in Residential Tenancies Board (RTB) registered accommodation would be able to claim the €500 credit. Student accommodation owned by third-level institutions are currently covered by the RTB. This benefit was not available previously.
Further details on the renters credit, will be set out when Minister for Finance, Paschal Donohoe, publishes the Finance Bill on Thursday, 20th of October.
This comes to the aid of those renting along with the most recent news of the Government signing off on an ‘Eviction Ban’ from November 2022 to March 2023.
There will be an introduction of an electricity credit of €600 to help with the energy price inflation. This credit will be paid in three instalments over the coming Winter months.
The Help-to-Buy Scheme has been extended to the 31st of December 2024. The scheme which was introduced in 2017 offers first-time buyers an income tax rebate of 5% of the purchase value of a newly built home priced up to €400,000. This translates as a tax rebate of up to €20,000. First-time buyers who purchase homes costing between €400,000 and €600,000 qualify for a rebate capped at €20,000. Homes priced over €600,000 are not eligible for a tax rebate scheme.
Third Level Tuition Fee’s
There has been a reduction introduced for third level fees for the academic year of 2022/2023.
- €1,000 off the student contribution for this academic year
- Families earning less than €62,500 a year will pay no more than €1,500 in tuition fees.
- Parents with a joint salary of between €65,000 – €100,000 will pay €2,500 for their child to attend third level education.
- Weekly social welfare rates will be increased by €12 for working age recipients
- There will also be a €12 increase in weekly payments for pensioners.