News

Rent Relief

The rent tax credit, which was introduced in 2023 for tax years 2022 to 2025, for those renting in the private sector will increase by €250 from €500 to €750 in respect of a single person and from €1,000 to €1,500 in respect of a jointly assessed married couple or civil partnership. The credit is only available to those who are not in receipt of any other State housing support.

Eligibility for the rent tax credit will be extended to include parents who pay for their children’s rental accommodation in the case of rent a room accommodation or digs. This change will apply retrospectively for 2022 and 2023.

Help to Buy Scheme

The help to buy (HTB) scheme has been extended, at current rates, for a further year until December 2025.

With effect from 11 October 2023, the HTB scheme will be amended to enable those availing of the Local Authority Affordable Purchase (LAAP) scheme to access the HTB scheme with the affordable dwelling contribution received through LAAP scheme being taken into consideration when calculating the 70% loan-to-value requirement.  

Rented Residential Relief A new tax relief for landlords will be introduced for a 4 year period from 2024 to 2027 in respect of tenancies registered with the Residential Tenancies Board or a residential letting to a public or local authority. The relief will be available, at the standard rate of tax, in respect of residential rental income, subject to the following limits: 

Landlords will be required to retain the property in the residential rental sector for the full duration of the scheme, as a full claw back (for all years) of the relief will apply in the event the landlord removes the property from the sector during the 4 year period.

Mortgage Interest Relief

A temporary 1-year mortgage interest relief is being introduced for those with an outstanding balance on their principal private residence of between €80,000 and €500,000 on 31 December 2022, and who have complied with their Local Property Tax (LPT) requirements.

The relief will be available at the standard rate of tax in respect of the increase in the mortgage interest payable in 2023 in comparison to the amount paid in 2022, subject to a maximum of €1,250 per property. 

Taxpayers will be required to file a tax return for 2023 in order to claim the relief. It is anticipated that the necessary amendments to facilitate this relief being claimed will be available in early 2024. 

Vacant Home Tax

The vacant home tax was introduced in 2023 and applies to residential properties which are occupied for less than 30 days in a 12-month period. The tax is charged at 3 times the property’s LPT charge. This will be increased to 5 times the property’s LPT charge and will apply from the next chargeable period which commences on 1 November 2023.

Employment Investment Incentive (EII)

The EII provides tax relief for capital investments in qualifying small and medium enterprises. From 1 January 2024, the minimum holding period required to obtain relief is being standardised to 4 years for all investments, and the limit on the amount that an investor can claim relief on for such investments is being increased to €500,000.  

Microgeneration of Electricity

The exemption from income tax, USC and PRSI for the micro-generation of electricity will be increased from €200 to €400. This applies to individuals who generate electricity on a small scale basis at their homes for their own consumption from renewable sources and sell the excess electricity produced.

VAT

The 9% VAT rate for gas and electricity will be extended for 12 months until 31 October 2024.

From 1 January 2024:

• The VAT registration threshold for services will increase from €37,500 to €40,000 and the VAT registration threshold for goods will increase from €75,000 to €80,000.
• The VAT rate for audio books and e-books will be reduced from 9% to zero.
• The VAT rate on the supply and installation of solar panels installed in schools will be reduced to zero.
• The flat-rate addition scheme which applies to un-registered farmers will decrease from 5.0% to 4.8%.
• The annual fund for the Charities VAT compensation scheme will be increased from €5 million to €10 million.

It was also announced that Revenue will soon begin a public consultation on how the VAT system can be modernised using advances in digital technology.

Carbon Tax

Carbon tax will increase by €7.50 from €48.50 to €56 per tonne. This will apply to auto fuels (e.g. petrol, diesel, etc.) from 11 October 2023 and to all other fuels (e.g. oil, gas, coal, etc.) from 1 May 2024.

Excise Duty

The excise duty (including VAT) on cigarettes will increase by 75 cents on a packet of 20, with a pro-rata increase on other tobacco products, from 11 October 2023. There will be no increase to the price of alcohol. The temporary reduction of 8 cent on petrol, 6 cent on diesel and 3.4 cent on Marked Gas oil was due to expire on 31 October 2023. This temporary reduction will be extended until 31 March 2024, and the rates will be restored in two instalments on 1 April 2024 and 1 August 2024.