Budget 2023: €1,000 tax reduction for renters, 50 cents for cigarettes, no price increase for a pint and no change in inheritance tax – everything we know so far

We are hours away from the budget to be announced tomorrow at 1pm in the Dáil Chamber by Treasury Secretary Paschal Donohoe and Public Expenditure Secretary Michael McGrath. As every year, the announcement will be broadcast live on TV, radio and even here on Independent.ie. There is still much to be decided, but here are some of the key actions the coalition has agreed on.

Steer

The higher tax rate of 40 percent only applies to earned income of over €40,000 under one of the household’s peaks. The move, which Fine Gael has been pushing for, is estimated to put in the pocket of a single earner €800 and €1,600 for a couple. It’s one of the biggest tax cuts in recent years.

The second USC band is to be raised from EUR 9,283 to EUR 10,908 due to the increase in the minimum wage. The personal tax credits for caregiving relatives will also be increased by EUR 100 to EUR 1,700.

Housing

Renters are set to benefit from the reintroduction of a total tax credit of €1,000 for people renting accommodation. Ministers have signed two loans of €500, one for this year and one for next year.

The “Help to Buy” program, which gives first-time buyers a €30,000 tax rebate, will be extended for a further two years.

childcare

Children’s Secretary Roderic O’Gorman has secured significant funding to provide a state subsidy towards daycare costs that could save families around €170 a month.

social care

A double payment of child benefit has been agreed and will be paid out by the end of the year. Caregivers and people with disabilities should receive a one-time payment of 500 euros. Other welfare recipients are expected to receive a double payment in the weeks following the budget, while the Christmas bonus will also be paid in December.

A final number for next year’s welfare increases is still being worked out, with Social Protection Secretary Heather Humphreys still pushing for €15 a week. However, the minister has been told that the financial means for such increases are not available and the final figures could be closer to €12. However, talks are still said to be held between Ms Humphreys and Mr McGrath.

energy crisis

Excise duty cuts on petrol and diesel will continue into the new year, as will the VAT cut on energy bills. All households receive an electricity bill credit of 600 euros, which is paid in two or three installments. However, the energy costs are not capped.

alcohol

There will be no additional taxes on beer or spirits in the budget, sources have confirmed to Independent.ie.

cigarettes

A pack of 20 cigarettes will cost an extra 50 cents in a new excise duty hike to be announced by Treasury Secretary Paschal Donohoe tomorrow. The measure has to be approved by the Dáil in a vote tomorrow, but with approval the new increase will apply from midnight.

inheritance tax

Inheritance tax caps will not be changed after fears the state could seek to reclaim more from the estate of deceased people. The most recent Commission on Taxation and Welfare pointed out opportunities for increasing revenue in this area.

For the same reason, there will be no changes to the capital gains tax regime, rates and rules.

Health

Health Secretary Stephen Donnelly has secured funding to eliminate hospital fees for all adults in the household. The policy will save people up to €800, which is the rate at which hospital charges are capped. Mr Donnelly has previously scrapped fees for children under the age of 16 and urged his government colleagues to extend that cut to all adults during budget talks.

Meanwhile, VAT on defibrillators will be reduced to zero to encourage their purchase to save lives. The devices send electrical impulses to restart the heart in the event of a cardiac arrest.

Gardai

1,000 new Gardaí are due to begin training at Templemore next year. There will also be 400 new Garda personnel to help free up frontline Gardaí for core policing duties. There will also be more overtime to help Gardaí fight crime and anti-social behavior.

hospitality

The hospitality VAT rate will rise from the reduced pandemic rate of 9 per cent to 13.5 per cent at the end of February, which will be a major blow to pubs, restaurants and hotels.

students

Students are facing a reduction in their fees and could also see an increase in their grants.

schools

A new free textbook program for children in elementary school is to be introduced and the student-teacher ratio is also to be reduced.

public transport

The 20 percent reduction in public transport fares will continue until the end of 2023.

business

Businesses will receive up to €10,000 a month on their electricity or gas bills under a €1 billion scheme to be announced in tomorrow’s budget.

Small and medium-sized businesses get paid 40 percent of their electricity or gas bill increases, up to a maximum of €10,000 per month.

The Temporary Business Energy Support Scheme (TBESS) will be backdated to September, will run until February and will be administered by the Revenue Commissioners.

A separate €200 million program will also be announced, allowing companies to receive up to €2 million in grants. This Enterprise Ireland program is for companies engaged in export and manufacturing. They need to create a business plan that shows how they will get through the crisis and control their energy costs.

The two new programs will also be backed by a low-cost loan, details of which will be announced tomorrow.

Agriculture

Agriculture Secretary Charlie McConalogue is expected to announce a new beef program, energy subsidies and funds for soil liming.

He will outline measures aimed at helping farmers to cope with the consequences of the war in Ukraine and to continue the environmental work that farmers have already started.

There were concerns that there would not be a new breast milk program when the BEEP-S scheme ended, but Mr McConalogue will and is understood to have a new plan with a similar level of funding to the €28m BEEP-S that he will run alongside the €150/cow CO2 efficiency program for dams in the new CAP.

Another feed scheme is also expected to be announced, which can be applied for later this year, and most farm tax measures will be extended.

Regarding the new CAP, 20 million euros of funding has been secured for 30,000 places in ACRES for 2023. There will also be additional funds for TAMS, Forestry and Organic, as well as the new and improved supports for Mother’s Milk and Sheep.

There will also be specific capital resources to support the development of anaerobic digestion in 2023.

To help farmers deal with high fertilizer prices, the minister will introduce an expanded multi-species sward/red clover scheme and the introduction of a new €8 million subsidy scheme to support lime application.

This is as is the new €10 million tillage incentive scheme announced by the minister at the plowing championships last week.

https://www.independent.ie/business/budget/budget-2023-1000-tax-credit-for-renters-50c-on-cigarettes-no-hike-in-price-of-a-pint-and-no-change-to-inheritance-tax-everything-we-know-so-far-42017798.html Budget 2023: €1,000 tax reduction for renters, 50 cents for cigarettes, no price increase for a pint and no change in inheritance tax – everything we know so far

Fry Electronics Team

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