Personal income tax bands and credits
The income tax standard rate band has been increased by €2,000 for all earners, resulting in the band for single individuals increasing from €42,000 to €44,000 and for married couples/civil partners with one earner from €51,000 to €53,000.
The personal tax credit, the employee tax credit and the earned income credit have all increased by €125. The home carer tax credit has increased from €1,800 to €1,950. The incapacitated child tax credit and the blind person’s tax credit have increased by €300.
Universal Social Charge (USC)
The 2% USC rate band ceiling has increased from €25,760 to €27,382. The 4% rate of USC has been reduced to 3%. The exemption for income less than €13,000 remains unchanged.
| Income | USC |
|---|---|
| From €1 – €12,012 | 0.5% |
| From €12,013 – €27,382 | 2% |
| From €25,383 – €70,044 | 3% |
| Over €70,044 | 8% |
| Personal tax credits and bands | 2025 | 2024 |
|---|---|---|
| Personal tax credits: | ||
| Single | €2,000 | €1,875 |
| Married | €4,000 | €3,750 |
| PAYE | €2,000 | €1,875 |
| Earned income tax credit for self-employed | €2,000 | €1,875 |
| Rent tax credit | €1,000 | €750 |
| Home carer's tax credit | €1,950 | €1,800 |
| Age exemption limits (aged 65 and over): | ||
| Single | €18,000 | €18,000 |
| Married | €36,000 | €36,000 |
| 20% standard rate bands: | ||
| Single | €44,000 | €42,000 |
| Married one income | €53,000 | €51,000 |
| Married two incomes | €88,000 | €84,000 |
Help to Buy Scheme
The Help to Buy Scheme has been extended for a further four years at the current rates until the end of 2029.
Rent tax credit
The rent tax credit has been increased to €1,000 per year (or €2,000 for jointly assessed). The credit for 2024 will also increase to €1,000.
Pre-letting expenses
The relief for the deduction of certain pre-letting expenses (capped at €10,000 per premises) from rental income will be extended for a further three years to 31 December 2027.
Sea-going naval personal tax credit
The sea-going naval personal tax credit of €1,500 per annum will be extended for a further five years to the end of 2029. This credit is for permanent members of the Irish Naval Service who have spent at least 80 days at sea in the previous year performing the duties of their employment.
Charitable donations and charities
Finance Bill 2024 will allow those making donations to sports bodies for capital projects and other objectives greater flexibility as to how those donations will be treated for income tax purposes. It is proposed that both PAYE and self-assessed donors will be able to choose for the income tax relief on donations under the relevant tax provisions to go either to themselves or to the sporting body itself.
Changes will also be made to the tax exemptions applying to sports bodies to facilitate long-term investments for the purposes of future capital projects and sport equipment needs.
Under the Charitable Donations Tax Scheme, charities will no longer have to be established for at least two years to access the scheme, and they will have a longer timeframe from the date of a donation to use the funds raised under the scheme for the important work they do.
Automatic Enrolment Retirement Savings Scheme
The tax treatment of the Automatic Enrolment Retirement Savings Scheme will be contained in Finance Bill 2024 and will be similar to the taxation of Personal Retirement Savings Accounts (PRSAs), with the exception of employee contributions.
Under the scheme, the employee, employer, and the Government will pay certain amounts into an employee’s pension fund. Employee contributions will be a set rate of annual salary. An employer will match the employee’s contributions and the Government will contribute an additional amount. As the State is making a direct contribution for employees within the scheme, there will be no tax relief available for employees on employee contributions.
Employer contributions will not be a taxable benefit for employees. Any growth in the funds within the scheme is exempt from tax and the funds will be taxed on drawdown, other than the 25% lump sum. The lump sum can be taken tax-free up to €200,000, is taxed at 20% between €200,000 and €500,000 and is taxed at 40% above €500,000.
Share-based remuneration
The Department commissioned a review of share-based remuneration and the results of this report have been published today. The report includes a number of recommendations which the Government will consider in due course.
Mortgage interest relief
The mortgage interest tax relief scheme that was introduced on a temporary basis last year has been extended for a further year. There has been no change to the qualifying criteria, whereby homeowners must have an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 as of 31 December 2022.
Qualifying homeowners will be eligible for the relief in respect of the increased interest paid on their mortgage in 2024 over 2022 at the standard rate of income tax (20%), capped at €1,250 per property.