British English Text: /”In a first-ever budget speech to the Irish Parliament (Dáil Éireann), Finance Minister Jack Chambers unveiled the 2025 budget plan this Tuesday afternoon. Have a look below for a comprehensive textual representation of his address.
Honourable Speaker, presenting the 2025 budget, the last one during the tenure of the current Government, this afternoon in the House in conjunction with my colleague, Minister Donohoe, is truly an honour.
Dear Speaker, when our Government assumed power back in June 2020, we were facing the repercussions of Brexit and grappling with an unparalleled global pandemic, which inflicted catastrophic impacts on our society and economy. The aftermath for families, enterprises and our lifestyle was indeed grave. As we were gradually emerging from the pandemic, we found ourselves amid the Ukraine crisis and the rising cost of living.
In response to these adversities, our Government adopted a unified approach, extending exceptional support through sequential budgets to the people, families, and businesses who were instrumental in reinforcing our economy to its current robust state. It wasn’t a given that we’d overcome these hurdles. It was our government’s determination to secure a better future for all and prudent public finance management that led us to recovery. With the 2025 budget, it is my conviction that we have laid out the strategies and actions that will maintain our positive upward trend and ensure our citizens can look forward to an optimistic future in our nation.
The 2025 budget features a twofold increase in child benefit payments and increases the rent tax credit, apart from a multitude of personal tax reductions. The key highlights include bonus social welfare payments and a hike in the minimum wage along with a tax on vaping.
As I present my inaugural budget today, I recognise the unique opportunity it affords us to plan for, transform, and shape our nation’s future. And this vision of the future isn’t merely about the ensuing month, year, or decade, but rather about nurturing a generation of children born today and onwards in Ireland to live affluent and gratifying lives.” /
The decisions taken today will pave the way for improved healthcare, superior education, enhanced housing, and notable improvements in infrastructure resulting in a longer life span. More importantly, these choices will not only give hope to today’s youth and their families, both domestic and overseas, but also ensure that they can afford their own homes and lead fulfilling lives in Ireland. This is the vision set by Budget 2025 which establishes a strong foundation for our country’s future.
The core elements of this government’s budgets, namely progress, fairness, and fostering genuine opportunities, are the guiding principles in the design of Budget 2025. Empowering communities, fostering wealth, addressing cost of living issues, and boosting life quality are all integral to creating a more effective State that can genuinely serve Ireland’s citizens. We aspire for Ireland to be a desirable location to reside in, work, raise a family, and spur employment and opportunities, forming a base for tangible advancements.
Infrastructure and Capital Outlay
Our capacity to serve the current and future generations rests on meticulous and well-considered management of the state’s resources. The fresh ruling from the European Union’s Court of Justice has bestowed one-off revenue upon the state that carries the potential for transformativeness. How the public infrastructure programme is prioritised and implemented in the coming decade will crucially determine the state’s economic performance. It’s of utmost importance that this revenue is not solely expended on everyday expenses or tax base reductions. A well-defined strategic approach should be in place for its utilisation to deliver for the future of our nation, enhance the lives of individuals and communities, and bolster small and medium businesses and global corporations.
Today, I aim to present an organised strategy which will provide guidance on the allocation of public funds to ensure the best possible outcome. Our government believes that these funds should be used to tackle pressing issues such as housing, energy, water and transportation infrastructures. Our financial, corporate, and industrial structure has played a crucial role in shaping our nation over the past century and it is our duty to protect, nurture and enhance it to boost the transformation of our nation and create opportunities for future generations. Our object is to ensure that Ireland evolves into a fair and equal society projecting optimism, affluence and advancements.
Our position in a globally competitive environment and our pursuit to attract international investments are directly linked to the importance of infrastructure and its critical role in Ireland’s competitiveness. It is vital for businesses of all sizes and for drawing in foreign investments into the country. Retaining our competitiveness and the ability to enhance this is crucial in retaining jobs across all sectors in our economy, regardless of their location.
The allocation of these unexpected revenues should be rooted in a set of overarching principles to benefit all residents by contributing to our future economic growth. This framework will be instrumental in ensuring the maximum return, both economically and socially, from this unique resource which can enhance the National Development Plan.
Departments such as Finance and Public Expenditure, NDP Delivery and Reform, will take the lead in developing this framework, incorporating inputs from other relevant departments and agencies to focus on public investment considerations in crucial infrastructure, including deliverability, value for money, additionality and priority for economic impact.
Today, I’m announcing the allocation of €3 billion for infrastructure spending. This will speed up existing progress, swiftly remove significant infrastructural hindrances and pave the way for future enhancements in living conditions and competitiveness.
Deciding how to best utilise these resources requires careful hierarchical placement, and it’s critical that their application leads to meaningful results.
I acknowledge that there are substantial needs not just in housing, but also in the water and energy infrastructure sectors which warrant immediate attention. Directing investments in these three domains will enable us to satisfy the present as well as the future demands of our nation.
Consequently, I plan to earmark these resources and release them when both the funding is mandatory and the necessary preparatory procedures are in place for their utilisation.
Water Infrastructure
In the endeavour to address water infrastructure, €1 billion is set aside for Irish Water meant for non-household capital expenditure. This will permit construction work nationwide on capital schemes connected to rectification task lists, new housing connections and the management of city wastewater loads.
Housing
The Government has channelled massive finances into housing solutions, and our mission is to constantly stimulate the influx of new homes. To aid this, an additional allotment of €1.25 billion will be given to the Land Development Agency (LDA), taking the cumulative funding accessible to the Agency to €6.25 billion, equipping it to roll out thousands more affordable homes.
The LDA will be charged with leveraging this capital in a way that can maintain the pace of supplying affordable and social homes.
Electricity Grid Infrastructure
Trust in our capacity to offer a safe, steady, and eco-friendly energy framework is crucial for positioning Ireland for future financial growth and investment.
In pursuit of this, I’m also assigning €750 million to enable an inaugural, direct equity injection to back capital expenditure on the continued enhancement of our electricity grid infrastructure.
Upgrading this central component of our national infrastructure will be a key factor in preparing our economy for the next phase of evolution. Ensuring a secure and sustainable energy supply will attract additional industrial investments, expedite the progress of the digital economy, facilitate decarbonisation, and improve our competitiveness.
The enhancement of the national electricity grid will call for capital expenditure on both onshore and offshore grids.
My conviction is that the notification of the provision of this finance to augment our electricity grid’s capacity will influence future investment decisions, both by local and multinational firms positively.
In case there are additional AIB share sales, I will strive to supply further funding for these essential infrastructure sectors – water, housing, and the electricity grid, to support our future economic growth.
The importance of reflecting on our past achievements cannot be overstated, particularly given the extensive plans for future infrastructure investment. Over the past century post-independence, our nation – Ireland – has evolved significantly, becoming more open-minded, diverse, affluent, fair, and influential globally. It is paramount that our prosperity continues on an upward trajectory. Our accomplishments are assessed by our treatment of people, more specifically, our ability to wield the strength of our economic progress to uplift everyone, with particular focus on those most vulnerable. Our national accomplishments are all the more precious because of the domestic generations who have had to fight for them; yet, we must never forget those who continue to endure struggles. Our power enables us, and more importantly, obliges us to help, a commitment we are ready to honour.
Speaker of the House, onto the topic of our macroeconomic perspective. It is encouraging to note that our economy, on the whole, is fairly sturdy. The previous year has seen inflationary tensions significantly dissipate and our domestic economy has exhibited strong growth. Record employment levels have been sustained, an impressive feat.
As we’ve moved past the pandemic, our economy has been operating at or near full capacity. A noteworthy fact is that nearly three quarters of our working-age citizens are currently employed – with female labour force participation hitting unprecedented levels. We ought to take pride in such a significant accomplishment.
Looking at the inflation rate, it was nearly 10% a couple of years ago but has remarkably reduced this year. In fact, since March, inflation has remained at or below 2%. This significant relaxation is a much-needed respite for families nationwide who have grappled with the everyday financial challenges brought about by increased prices in the last two years.
Nonetheless, in spite of the diminishing inflation headline rate, I am fully conscious that the struggle continues for many due to the persistently high cost of living. To this end, the 2025 budget incorporates a scheme to manage the cost of living, specifically tailored to support the most disadvantaged and ease the financial tension over the winter season.
Speaker of the House, it is evident that the primary restriction on expansion currently is lack of adequate resources. This fact underscores the urgency of our ongoing efforts to reduce infrastructure deficit and enhance the productive efficiency of our economy. The Government is fully aware of the necessity to invest in the future and bolster our competitive standing in the years ahead. Meticulous planning of the 2025 Budget aims to confront these challenges on a grand scale, setting up durable solutions to foster an economy that is more sustainable, efficient, and resilient.
The 2025 Budget is formulated amidst escalating global strife and geopolitical uncertainty. The recent years have unmistakably demonstrated that we live in a world increasingly susceptible to destabilising incidents. As a small, globally integrated, and economy driven by trade, any deterioration on the international front will certainly result in immediate repercussions for Ireland’s economy.
Although it is beyond our control to preempt external shocks, we can equip ourselves to respond optimally when they arise. In view of this fact, the 2025 Budget seeks to strike a harmonious balance between providing current key stakeholders- families, workers, and businesses- the aid they require and investing in public services and infrastructure, priming us for future adversities.
Despite the looming external risks, the short-term outlook for the domestic economy is positive. The era of heightened price volatility has ended and inflation is now on a more predictable course. This moderation in inflation, anticipated to stay under 2 per cent both this year and next, will facilitate real wage enhancements and bolster consumer spending growth.
On the whole, my department forecasts that the modified domestic demand (MDD) indicative of the domestic economy will grow by 2.5 per cent this year and approach 3 per cent growth next year.
It’s expected that robust domestic economy growth will bring about continued positive developments in the job market. Employment level is predicted to rise by nearly 110,000 in the two years leading to the end of 2025 and unemployment rate is projected to maintain at around 4½ per cent.
These macroeconomic projections from my department are backed by the Irish Fiscal Advisory Council.
Fiscal outlook.
As previously discussed, Mr Speaker, the Irish economy is robust on a superficial plane, yet there exist crucial vulnerabilites in our public finance structure that cannot be ignored whilst formulating budgetary plans. Our public funds are largely subject to a precarious dependency on corporation tax, a substantial portion of which is largely speculative, with no correlation to our national economy. Furthermore, a great proportion of our income tax earnings are intertwined with this highly focused revenue stream. As iterated on multiple occasions, it’s crucial that we refrain from using these possibly temporary gains to support enduring expenditure processes.
By now, we should all be aware of the fundamental challenges that are already demanding our attention. These encompass factors as diverse as an ageing populace, climate and digital shifts and the trend towards deglobalisation. We’re faced with significant expenses in dealing with these issues, let alone grappling with unforeseen future challenges. Therefore, our current budget decisions must improve our capacities to tackle these complications head on.
According to predictions from my department, this year our tax revenue should reach about €105.7 billion, marking a rise of around €13.6 billion from our previous forecasts in the Spring, primarily owing to corporation tax revenues and earnings from the verdict of the Court of Justice of the European Union.
After the recent ratification, early this year, of the Future Ireland Fund along with the Infrastructure, Climate and Nature Fund Act, I officially launched both Funds on the 30th of July. These crucial funds will play a pivotal role in precluding future generations from having to address the known issues that we’re presently grappling with. They allow us to prepare for the future during times of notable surplus, while simultaneously maintaining our capacity to respond and cater to the needs of those most in need, to carry on investing in enhancement in public facilities, quality public service, and consistently provide support to our businesses.
Mr Speaker, €4.3 billion was deposited into the Future Ireland Fund and another €2 billion into the Infrastructure, Climate and Nature Fund this past September. Additionally, before the year concludes, €4.1 billion is earmarked for transfer into the Future Ireland Fund. Next year, the combined transfers into both funds should reach approximately €6 billion, implying that by the end of next year, in excess of €16 billion would have been redirected into these funds.
I’m pleased to announce to the House that our expectations indicate an overall Government surplus of €23.7 billion for this year, equivalent to 7.5% of our national income, and €9.7 billion or 2.9% for the upcoming year. Nevertheless, when the unique revenues from ‘windfall taxes’ and European Union Court of Justice judgment are removed, an underlying total Government deficit of €6.3 billion is projected for 2024, and €5.7 billion deficit for 2025.
Our debt ratio is positively changing. Since this Government’s induction in 2020, the total Government debt was approximately 110% of national earnings. Current predictions from my department indicates that this ratio will go down to 69% this year and continue to decrease to 56% by the close of the decade.
To highlight our financial strategy for the summer, an expenditure of €8.3 billion was agreed upon for the 2025 budget. This aligns with a 6.9% growth in spending and will support increased capital expenditure and the provision of additional public services due to a growing population.
Budget 2025 brings in a net tax package of €1.4 billion alongside a spending package worth €6.9 billion. Today, I am also declaring a living expenses package worth €2.2 billion. When put together, the total package for 2025 budget comes to €10.5 billion.
The primary goal for the personal income tax package for the fiscal year 2024 is to aid low to middle income earners, by extending upon the advancements made during our current Government’s tenure, particularly in relation to tax credit increments and USC cuts.
As such, I am confirming a personal income tax package of €1.6 billion today.
– The main tax credits being the Personal, Employee, and Earned Income Credits are due to increase by €125.
– Next, the Standard Rate Cut-Off Point will see an increase of €2,000 making it €44,000. This will also see proportional increases for married couples and civil partners.
– And finally, the USC will see a decrease from 4.0 per cent to 3 per cent. This is the second consecutive drop to this rate.
After today’s governmental green light, the national minimum wage is set to rise by €0.80 per hour, reaching €13.50 per hour as from 1st January 2025. In keeping with this wage elevation and working towards keeping these essential workers out of the higher USC brackets, I’ll raise the entry point for the new 3% rate by €1,622 to €27,382. This will result in a yearly net pay increase of roughly €1,424 for full-time employees earning the minimum wage.
Furthermore, the incremental growth of the primary tax credits means that in 2025, a single individual earning €20,000 or less, will fall outside the purview of income tax.
The Government is committed to backing individuals and families with caring obligations, recognising carers as integral to our society. In addition, addressing child poverty is a governmental priority.
So, I’ll be implementing the following increases:
– A €150 increase for the Home Carer Tax Credit
– A €150 increment for the Single Person Child Carer Credit
– A €300 increase for the Incapacitated Child Tax Credit
– A €60 rise for the Dependent Relative Tax Credit
Additionally, after a significant period, the Blind Tax Credit will see an increase of €300.
These income tax and USC enhancements that I’ve put forward today will offer genuine benefits to all taxpayers, regardless of their income levels. As an added benefit, the forthcoming cost of living measures announced by Minister Donohoe will bring more relief.
A major goal of this Government is to protect workers from paying more income tax solely due to income growth over time. Accounting for the total personal income tax alterations made during this Government’s term, we have:
– Increased the main tax credits by 21% or €350 each, from €1,650 to €2,000
– Enhanced the Standard Rate Cut Off Point for single individuals by 25% or €8,700, from €35,300 to €44,000. Similar increases have been undertaken for those married or in civil partnerships
– Lowered the USC middle rate by 1.5 percentage points from 4.5% to 3.0%
The upper limit of the 2 per cent USC category has been elevated by 34 per cent or €6,898, changing it from €20,484 to €27,382.
Inheritance and Gift Tax (IGT)
Intention to further raise all thresholds for the Inheritance and Gift Tax (IGT), previously amended in 2019, was declared. This decision is motivated by the rise in property costs in the meantime. The plan is to heighten the Group A threshold from €335,000 to €400,000, the Group B threshold from €32,500 to €40,000, and the Group C threshold from €16,250 to €20,000.
Minor Advantage Exemption
The Minor Advantage Exemption enables employers to offer nominal non-monetary perks or incentives to their employees, free of income tax, PRSI, and USC. A decision was made to increase the yearly cap specified in the exemption from €1,000 to €1,500, plus allowing employers to bestow five non-cash gifts under this exemption in a single year. This will give employers more latitude in presenting tax-free incentives to their staff. This could mean employees receive up to three more tax-free benefits or presents, for instance to recognise exceptional work or significant life milestones.
CervicalCheck Compensation
An exemption from income tax, capital gains tax, and inheritance and gift tax on payouts to women affected by the shortcomings of the CervicalCheck national screening programme is being proposed. Future and past income or profits from these women investing their CervicalCheck payouts will also be tax-exempt. This contributes further to the government’s remedial efforts post the CervicalCheck screening programme failures.
Maritime Staff Tax Credit Extension
The Naval Service is crucial to the safety of our country. To bolster ongoing recruitment and retainment efforts, an extension of the Maritime Staff Tax Credit has been implemented for five more years, up until 2029, acknowledging the unique challenges our naval staff face at sea.
Company Car Tax – Benefit-in-Kind
Pertaining to the Company Car Tax (BIK) framework, an additional year’s extension has been granted to the provisional universal discount of €10,000 on the Original Market Value (OMV), initially adopted in 2023.
In an endeavour to aid employees owning electric company vehicles, there will be a substantial BIK relief of €45,000 by 2025. This comprises a €35,000 specific to electric vehicles (previously legislated) along with a temporary universal relief of an extra €10,000. A provision has also been made for BIK exemption for home-based electric vehicle chargers for directors and employees.
Rent Tax Credit Scheme
The 2023 budget saw the introduction of the rent tax credit by this Government, providing essential financial aid to renters across the nation. Today, we’re announcing an increase in the value of this credit by €250, bringing it to €1,000 for an individual and €2,000 for a jointly assessed couple for the year 2025. Considering the increased cost of living pressure on the nation’s renters, the credit for the year 2024 is also being increased to €1,000 for individuals and €2,000 for couples.
Extension of Home Buyer Support Scheme
With home ownership being a pivotal goal of our Government, we launched the Help to Buy scheme, which has so far assisted over 50,000 individuals or couples in becoming homeowners. To offer assurance to potential homebuyers and stabilise the market, we’re extending this scheme up until the end of 2029.
Extension of Pre-letting Expense Relief
To motivate landlords to bring vacant properties into the rental market, thus increasing rental accommodation supply, we are extending the pre-letting expenses relief. This extension will be for an additional three years until the end of 2027, aiming towards Housing for All.
Extended Reduced VAT Rate on Gas and Electricity
As a part of the government’s cost of living package, we’re extending the reduced VAT rate of 9% on gas and electricity for an extra half a year until 30th April 2025, aiming to offer continued assistance to households and businesses.
A new Financial Resolution will also be introduced later today concerning Mortgage Interest Relief.
The announcement of Mortgage Interest Tax Relief in the prior year’s budget has given succour to home loan borrowers affected by hiked interest rates in 2023 compared to 2022. Recognising the persistent financial strain high interest rates are placing on households, I am extending this support for an additional year. The extension ensures that home loan borrowers are assisted in compensating for the heightened interest charges incurred in 2024 over 2022.
Proposals to Support Commercial Organisations
The sustenance of our economy is largely owed to the contribution of numerous commercial enterprises, both minor and major. This government pledges its commitment to assisting these businesses in their trajectories of growth, innovation, and generation of work opportunities.
Diminishing complexities and enhancing the Appeal of Ireland
With recent international developments and agreements, the corporate tax regulations have encountered major complexity. However, in the Budget of 2025, I am taking crucial steps towards alleviating this burden through the initiation of an exemption for overseas dividends. This step will be operational from the start of next year and will present a simplified alternative for double tax relief for multinational companies. In the following year, we will continue implementing these exemptions including extending the geographic scope and a potential exemption for foreign branches.
Maintaining the allure of Ireland for businesses is essential. We launched a public consultation last Friday to review the tax treatment of interest with the aim of reducing our tax code’s complexities.
It is important to back pioneering businesses to confront challenges and capitalise on the prospects offered by the increasingly digital world. My department will focus on reviewing the Research & Development tax credit in the forthcoming year.
In the meantime, to affirm this government’s enduring commitment to innovative businesses, I am making provisions to augment the initial year payment threshold in the R&D tax credit from €50,000 to €75,000. This will offer additional cash-flow support to companies undertaking smaller R&D projects or applying for the credit for the first time.
Aiding Small to Medium Sized Enterprises.
Highlighting the crucial role that start-ups and expanding businesses play across the nation in terms of employment and future market leadership potential, the government has consistently pledged its support for such ventures. This includes providing assistance in securing funding via programmes like the Employment Investment Incentive, the Entrepreneurs Start-Up Relief, and the Start-Up Capital Incentive.
My department has recently finished reviewing these initiatives, and I am glad to report that all of them will be extended for an additional two years, until the end of 2026. Equally notable is the fact that the maximum investment claim under the Employment Investment Incentive is being increased from €500,000 to €1 million, and the amount of relief provided through the Entrepreneurs Start-Up Relief is rising from €700,000 to €980,000.
Coinciding with this and in acknowledgement of our government’s dedication to fostering a flourishing angel investment landscape for businesses in Ireland, I am making changes to the Capital Gains Tax relief aimed at innovative start-up investors, raising the lifetime gain limit from €3 million to €10 million. This amendment will take effect soon, following its announcement last year.
Moreover, to benefit new start-up corporations, enhancements are being made to the section 486C small firm start-up relief from corporation tax. A new qualification method, referencing Class S PRSI, will broaden the relief’s reach to small, owner-operated start-up corporations.
For businesses in the scale-up stage, the introduction of a new relief covering costs associated with a company’s debut listing on an Irish or European Stock Exchange is planned, subject to a €1 million limit. Furthermore, a Stamp Duty exemption, contingent upon State Aid stipulations, will be established by my department in the upcoming year in an effort to help Irish firms to grow and scale. This provision would facilitate access to equity for Irish SMEs via financial trading platforms tailored to fulfil their funding requirements.
In another move to help small businesses, the supply of goods and services’ VAT registration limits, currently set at €80,000 and €40,000, will be lifted to €85,000 and €42,500 respectively. Lastly, there’s the matter of retirement relief.
Retirement Relief contributes to the seamless transference of family-run enterprises and agricultural holdings between generations, fostering continuity in their substantial contribution to Ireland’s economy. As of 1st January 2025, two alterations will be implemented. The upper age boundary for the relief, presently 65, will be extended to 70, mirroring current employment norms. Moreover, should a child or children sell assets amounting to over €10 million within a dozen years of acquisition, a recall of the relief will be triggered. Thus, if said assets are held for over twelve years, complete Capital Gains Tax abatement will be applied, encouraging the thriving of family-owned enterprises, pivotal for our community life.
Section 481 Relief
Pivoting now to the audiovisual sphere: Ireland’s global standing as a hub of premier screen production, brimming with creative vivacity brings immense national pride. The government has shown substantial commitment in recent budgets to foster and celebrate the industry’s achievements.
To sustain this vibrant momentum, and broaden the Irish industry’s scope, the inauguration of a novel Tax Credit for Unscripted Production will be announced today, dependent upon European Commission consent. This credit will offer a 20% rate on admissible expenditure up to €15 million. Similar to other audiovisual reliefs, it necessitates passing a cultural litmus test.
In targeting the specific obstacles smaller feature films encounter in bringing their narratives to life, a new 8% uplift is being introduced, under the section 481 film tax credit, subject to state aid endorsement. This will cover feature film productions with a peak admissible expenditure of €20 million. Further specification surrounding these twin supports will be divulged in next week’s Finance Bill.
The significance of the Visual Effects (VFX) sector within Ireland’s broader audiovisual landscape has not been overlooked. Instructions are in place for my team to scrutinize international sector trends over the forthcoming year, in anticipation of proposing sector-specific measures in the 2026 Budget, if suitable.
At last, acknowledging the significance of share-based compensation in incentivising and retaining staff, which subsequently fosters business prosperity and expansion, an independent inquiry into share-based remuneration was instigated by my department this year. Released today, the report from that enquiry includes numerous proposals, which I intend to deliberate over in the foreseeable future.
Farm life
The agriculture and agri-food sectors are indispensable for our economy. These sectors are deeply integrated into our communities and broader society, with Irish farmers playing a crucial role in supplying quality food for local and international markets. They are highly valued for their quality goods and farming practices.
Prolonging agricultural stock reliefs
A number of crucial agricultural tax reliefs are set to conclude at the end of this year. I hereby confirm the extension of the following reliefs up until the conclusion of 2027: General Stock Relief, Stock Relief for Young Trained Farmers, and Stock Relief for Registered Farm Partnerships. Additionally, I will be expanding the scope of accelerated capital allowances for farm safety equipment by including more qualifying farm safety equipment types eligible for the relief.
Income stability (farming/dairy)
I comprehend that there can be fluctuations in income in the general farming sector, and more specifically in the dairy sector. I am eager to progress an income volatility measure to back the farming sector for review prior to the next year’s budget. These plans necessitate intricate appraisals of intricate policy matters regarding its operation within financial regulation, governance and legal structures. My team will collaborate with the Department of Agriculture, Food and the Marine to advance proposed measures for review.
Agricultural Stamp Duty reliefs
As farming practices have been changing in recent years, I am updating both the Young Trained Farmer Stamp Duty Relief and the Stamp Duty relief relative to farmland leasers. In order to reflect these changes, the relief for Young Trained Farmers will be adjusted to be claimable by an individual farmer conducting farm business through a corporation. The leasing relief will also include farmers who have decided to incorporate their business.
Agricultural Relief
Agricultural Relief facilitates intergenerational farm transfers and is a vital initiative to encourage our youth to continue their lives on the family farm.
In recent history, the price of agricultural land has amplified beyond the rate of inflation, creating a challenging environment for authentic farmers to acquire the necessary land for their agricultural activities. In view of the concerns regarding the exploitation of Agricultural Relief for tax planning purposes by high net-worth individuals, an extension of the six-year active farmer trial will be applied to those bestowing the gift or inheritance, providing assistance to both current and aspiring farmers.
Regarding the Farmers flat rate compensation, everyone in the House should be informed that this plan reimburses unregistered farmers in aggregate for the VAT they incur on their agricultural inputs. Taking into consideration macroeconomic information supplied by the CSO and the Revenue Commissioners for the 2022-2024 period, a suggestion has been made to amplify this rate from the existing 4.8 per cent to 5.1 per cent, starting from 1 January 2025.
The Residential Zoned Land Tax (RZLT) plays a crucial role in stimulating the construction of residential areas on suitable sites identified by local councils throughout the nation. It’s imperative that this regulation not impose excessively on landowners conducting legitimate economic activities on their territory. As such, I am offering an exemption in 2025 to any such parties, provided they request a rezoning of their land in correlation with the activity they undertake there. The Minister for Housing, Local Government and Heritage will dispense guidance to local councils to consider and make allowances for rezoning petitions where landowners wish to persist in their existing economic pursuits.
In the subject of sports and philanthropy, carrying through the promise made in the previous year’s budget speech, I intend to initiate measures to bolster national sporting entities in their strategic planning and future investment. Modifications will be made to the current tax exemptions granted to these groups to aid long-term investments for future capital works, sports equipment acquisition, supporting Ireland’s elite athletes, and promoting active sports engagement.
In efforts to provide incentives to individuals supporting sports organisations, particularly for capital projects and additional goals, I plan to propose changes to the Finance Bill. These adjustments aim to offer more flexibility on how such donations are treated for income tax purposes. I intend to enable PAYE and self-assessed donors to select whether they, or the sports organisation, receive the income tax relief on their donations, according to the tax legislation in place. I am hopeful that this will encourage taxpayers to directly support local and national sports clubs and organisations.
I am deeply committed to the idea that physical activity is crucial for the health and mental wellbeing for everyone, regardless of age. In this context, I am interested in exploring how the tax system can be utilised to promote greater engagement in sports and physical fitness activities, including gym work-outs. The objective for the upcoming year is for my team to delve into this matter more profoundly, with a plan of creating proposals to be considered for the next year’s budget.
Concerning charities and philanthropy, the National Philanthropy Policy, introduced last December, which runs for five years, is integral to promoting a fresh outlook on charitable giving. In backing this policy, one of the first initiatives is to remove obstacles that prevent charities from enjoying the tax benefits from the Charitable Donations Tax Scheme. As part of this, requirements requiring charities to have been founded at least two years before applying to the scheme will be scrapped. Charities will also have an extended period from the date of a donation to use the funds from the scheme in pursuit of their noble causes.
On health-related matters, specifically tobacco, the excise duty for a 20-cigarettte pack will see a rise of €1, with other tobacco products experiencing a proportional increase. This implies that a packet in the most popular price category will now cost €18.05. This supports the public health strategy of minimising smoking rates across Ireland. An official Financial Resolution will be presented today to apply this new measure.
On e-cigarettes (eliquid excise)…
Due to rising health concerns resulting from significant e-cigarette consumption, a household levy will be imposed on all e-liquids used in such devices. Each millilitre of e-liquid will be taxed an additional 50c. A standard disposable vape, which holds approximately 2ml of e-liquid and currently costs around €8, will subsequently see its price increase to €9.23 after tax. However, due to both operational and bureaucratic complications, the enforcement of this tax will be delayed until the middle of the subsequent year and its commencement order remains pending.
With regards to concerns raised by potential homeowners regarding the bulk buying of properties by investment companies, a move to dissuade such large-scale purchases will be enforced. The stamp duty rate on the mass acquisition of properties will be raised immediately from 10% to 15%.
The bank levy will also be prolonged for an additional year with the aim of raising €200 million. Given the sector’s previous reliance on the economy during the financial crisis, it is only fitting that the sector continues to contribute to the Irish economy.
Furthermore, an increase in the stamp duty rate will be applied to luxury residential properties valued over €1.5 million, increasing the rate to 6% effective immediately. The existing rates of 1% and 2% will proceed for properties valued up to €1 million and above €1 million respectively, with the previous 6% rate applicable for values exceeding €1.5 million.
The rate of the Vacant Homes Tax will also be raised from 5 to 7 times the existing base Local Property Tax rate to optimise the use of available housing. This increase will become effective from the next billing period, starting this November.
In the wake of the growing climate change concerns, several relevant tax measures have been announced in the Budget for 2025. This government has undertaken significant strides towards heightening Ireland’s climate actions. More specifics on this topic will focus on VRT issues.
A revision is being made to VRT for battery electric commercial vehicles (BEVs), allowing them to be eligible for the €200 VRT rate. Due to the weight of their batteries, BEVs currently face competitive disadvantages compared to traditional fossil fuel vehicles, preventing them from qualifying for this deduction. However, this modification will incorporate them into its purview.
An emissions-focused approach is also being integrated into VRT for category B commercial vehicles. An encouraging measure, it ensures an 8% reduced rate for those vehicles that emit less than 120grams of CO2 per kilometre with the aim to boost their sales.
The Accelerated Capital Allowances scheme will continue to support Gas and Hydrogen-powered vehicles for another year. This extension provides the Department of Transport with the necessary time to reassess the scheme to ensure it supports the hefty transport sector in their journey to decarbonisation.
With regard to emission thresholds for vehicle capital allowances, plans are afoot to alter the classification of a low emitting company car. This will involve reducing the maximum emission cap to qualify for capital allowance relief from 156 grams per kilometre to 141 grams per kilometre, taking effect from 1 January 2027. The reason for this future start date is to give companies who offer such vehicles to their employees enough time for adjustment. This strategy aims to motivate the utilisation of EVs in the company car sector, which will promote the growth of a used EV market over time.
CO2 emissions from petrol and diesel will face an increased carbon tax of €63.50 per tonne, up from €56.00. This will be effective from 9 October, as stated in the Finance Act 2020. For other fuels, this increase will be applied in May 2025, post the winter home-heating season. In line with the Programme for Government’s commitment and endorsed by the ESRI, the revenue generated from this increase in carbon tax will be used to shield vulnerable individuals from undesired impacts of the tax hike, partially fund a transformative national retrofitting and energy efficiency programme, and facilitate and sustain farmers in their green transition.
Heat pumps are also a key aspect of this transition towards more eco-friendly measures.
It has been my decision to decrease the VAT rate for heat pump installations from the typical 23 per cent to a lower rate of 9 per cent. This action stands in alignment with the government’s National Retrofit Plan which seeks to transform Irish homes through retrofitting and replacing older, inefficient heating systems with heat pumps.
Motor Insurers Insolvency Compensation Fund
On behalf of both myself and Minister of State Richmond, I am pleased to declare a cut in the Motor Insurers Insolvency Compensation Fund levy from 1 per cent to a negligible 0 per cent. As of 1 January 2025, this will benefit approximately 2.2 million policyholders upon renewal, following the previous decrease from 2 per cent to 1 per cent in the 2024 fiscal plan.
Review of funds sector
Globally, Ireland holds a top position in the investment funds and asset management sector. This industry provides significant employment, with nearly 20,000 jobs, of which around half are located outside Dublin.
In the previous year, my department formed a Funds Review Team to conduct an extensive forward-looking examination of the Funds sector, with an objective to protect Ireland’s prominent position in the global investment and asset management sector.
In the near future, I will present the report received from this review to the Government for consideration, after which it will be published. Upon reviewing the findings, the next steps will be delineated.
Other measures
I have also decided to extend the excise relief initiated in the previous year to independent small producers of fermented beverages such as cider, perry, mead and non-grape wines like elderberry and strawberry wines. Moreover, this relief will also be applicable to higher strength cider and perry produced by these independent producers.
Conclusion
Honourable Ceann Comhairle, I firmly believe that the 2025 Budget is designed with the welfare of the masses at its heart. It enables us to pursue improved services and infrastructure for everybody, to create better communities, support social enterprise, assist those most vulnerable, ensure our national businesses have the potential to develop and thrive, and maintain our attractiveness and competitiveness for international investments and business pursuits.
On the day of my appointment as Minister for Finance, we lost one of the nation’s finest individuals and without a doubt, our best commentator.
Micheál O’Muircheartaigh, an iconic figure of our nation, is renowned for his exceptional eloquence and unparalleled expertise on GAA matters. His insight extends beyond sports, as evidenced by the memorable sayings he is known for, embodying both his linguistic prowess and wisdom.
On the occasion of his 90th birthday, his counsel to the young generation was to persistently maintain a forward-looking mindset, with hope being the guiding light. He categorised hope as the most significant virtue.
As chosen members of the government, it is incumbent upon us to engender a tangible sense of hopefulness for what lies ahead. Our duties include promoting positive attitudes, shaping a superior State, and evincing faith in future opportunities. This budget embodies these ideals and represents our dedication and determination to foster responsible political practices, support economic stability and most importantly, champion a more equitable society. It is a blueprint for a future filled with anticipation and hopefulness.
Mr Speaker, I am confident that Budget 2025 offers us the route and resource to steer our course towards more optimistic and hopeful times ahead.
The decisions we make at this moment, impact the well-being of our populace, communities and the entire nation.
In Irish: I have unwavering faith in the ability of our people and potential of our country to achieve even greater heights. Budget 2025 lays the foundation to realise this objective.
I commend this budget to the House’s consideration.