AN OVERALL package of €10.5 billion has been set out in Budget 2025, this is made up of once-off measures worth €2 billion, total expenditure of €6.9 billion and additional capital expenditure of €1.6 billion and permanent tax changes of 1.4 billion for 2025.
Budget 2025 was delivered by Minister for Finance Jack Chambers (FF) and Minister for Public Expenditure Paschal Donohoe (FG).
The State’s independent budgetary watchdog, the Irish Fiscal Advisory Council, has warned that Budget 2025 repeats Ireland’s past mistakes of putting billions into the economy when it is at full employment.
Here are some of the key announcements from the Budget.
Social Welfare:
A social protection package worth almost €2bn has been announced in Budget 2025, described as the largest in the history of the State.
Double payments for some social welfare recipients in October
€12 increase for those receiving the weekly Social Protection payment
Carer’s allowance means test disregard to increase to €625 for a single person and €1,250 for a couple
Domiciliary care allowance to increase by €20 and carer’s support grant to rise by €150 to €2,000
Cost of living:
Minister Chambers announced a cost-of-living package worth €2.2bn, designed to “support the most vulnerable and ease the financial burden over the winter months”.
Energy credit of €250 for all households to be paid in two equal payments, one before the end of 2024 and one after
Proposal for the 9% reduced VAT rate for gas and electricity to be extended for another six months to 30 April 2025
Further €300 lump sum payment to fuel allowance recipients in November
Additional €200 for recipients of the living alone allowance
Cigarettes, vapes and alcohol:
A new excise duty is to be introduced on vapes and e-cigarettes from the middle of next year, while the price of a packet of cigarettes will once again rise.
Excise duty on a pack of 20 cigarettes to increase by €1, bringing the price in the most popular price category to €18.05
Pro-rata increase on other tobacco products
Domestic tax on e-cigarettes to apply to all e-liquids at rate of 50 cent per ml of e-liquid
Typical disposable vape contains 2ml of e-liquid, meaning tax will bring price to €9.23 including VAT
No increase in excise duties on alcohol
Housing and renters:
A raft of measures in relation to housing were announced by Mr Chambers, who said he wanted to give certainty to future homebuyers and the market. For renters, he said he wanted to recognise the cost-of-living pressures currently being faced.
The rent tax credit offered to tenants will rise from €750 to €1,000, and to €2,000 for a jointly assessed couple
An additional €1.25bn will be made available to the Land Development Agency, bringing the total amount of funding for the LDA to €6.25bn
Help to Buy scheme will be extended until the end of 2029
Properties worth over €1.5m to pay 6% stamp duty
Existing 1% stamp duty to apply to values up to €1m and 2% above €1m
Relief for pre-letting expenses for landlords extended for three years until the end of 2027 to help vacant property owners bring accommodation into the rental system
Vacant homes tax increased from five to seven times the property’s existing base Local Property Tax rate
Children:
Double payments of child benefit in November and December
Double payment of the foster care allowance
€400 lump sum payment for working family payment recipients
€100 lump sum payment per child to recipients of qualified child increase payments
National childcare scheme funding to rise by 44%, resulting in reduction of fulltime childcare costs by €1,100
New ‘baby boost’ one-off payment of €420 for each newborn child from 1 January
Free public transport to be extended to children aged five to eight
Education:
Free schoolbooks initiative extended to transition and senior cycle pupils
Funding to continue for the school transport fee reduction and State exam fee waiver
Continued reduction of student contribution fee by €1,000
Once-off reduction of 33% in contribution fee for apprentices in higher education
Post-graduate tuition fee contribution increase of €1,000 for student grant recipients
Income Tax:
The Universal Social Charge rate will see a second consecutive reduction, while Minister Chambers also announced increases to the main tax credits.
The USC will be cut from 4% to 3% on incomes of €25,000 to €70,000, the second consecutive reduction to the USC rate
The national minimum wage will increase by 80 cent to €13.50 per hour from 1 January 2025
Entry threshold to 3% rate increased by €1,622 to €27,382
The main tax credits – the Personal, Employee and Earned Income Credits – will increase by €125
The Standard Rate Cut Off Point will increase by €2,000 to €44,000, with proportionate increases for married couples and civil partners
Inheritance tax will increase for all thresholds – Group A up from €335,000 to €400,000, Group B up to €40,000 and Group C up to €20,000
Exemption from Income Tax, Capital Gains Tax and Capital Acquisions Tax on payments made to women impacted by CervicalCheck failures
Carers:
Minister Chambers told the Dáil that carers play a fundamental role in Irish society, saying the Government is committed to supporting individuals and families with caring responsibilities.
Home carer tax credit and single person child carer credit to increase by €150
Incapacitated child tax credit to increase by €300
Dependent relative tax credit to rise by €60
Blind tax credit up €300
Inheritance tax:
The amount that a person can receive as a gift or inheritance from a relation before having to pay Capital Acquisitions Tax will be increased as part of Budget 2025.
The Group A threshold for CAT – which includes gifts or inheritance from parents to their children – will rise from €335,000 to €400,000
The Group B threshold – which includes gifts or inheritances from siblings – will rise from €32,500 to €40,000
The Group C threshold – which includes gifts and inheritances from relatives like uncles, aunts or cousins – will rise from €16,250 to €20,000
Carbon tax:
A number of climate-related tax measures have been announced, with another hike to the carbon tax also confirmed.
€7.50 increase on current rate of carbon tax on petrol and diesel from €56 to €63.50 per tonne of carbon dioxide emmitted from 9 October
Including VAT, carbon tax increase represents a rise of around 2.1 cent per litre of petrol and 2.5
cent to a litre of diesel
Increase on carbon tax levied on other fuels, including home heating, to be brought in from May 2025
Amendment for battery electronic commercial vehicles so people can qualify for €200 vehicle registration tax rate
Health:
Minister Donohoe has said that Budget 2025 includes funding for a range of new measures that will increase access, affordability and capacity in the health service.
495 new beds to health services across hospital and community services
Increased access to IVF and Hormone Replacement Therapy to be free of charge
Increase in numbers working in health service
Justice and defence:
A €3.9 billion package for the justice sector has been announced as part of Budget 2025.
350 more staff to be recruited as the Irish Prison Service
Further recruitment of 1,000 gardaí and up to 150 garda civilian staff
€1.35bn allocated for Defence Forces, to help provide for recruitment of net increase of 400 members
