Budget 2013 – Summary

The 2013 budget was read to the Dail yesterday afternoon, with no great surprises this year. Total spending cuts of €2BN were announced, as was the expected property tax. New homes bought this year will be exempt from this tax for 4 years, as will any homes bought by first time buyers.

It has been confirmed that the 0.6% pension levy will cease as planned in 2014, but we await clarification on a new €60,000 pension income ceiling. Jobseekers benefit will be payable for 9 months, down from 12 months.

Despite another harsh budget, our Exchequer Borrowing Requirement for 2013 will still be a staggering €15.4BN.

The other main points of this years budget are outlined below.

Budget 2013 – Main Points:

  • 12.5% corporation tax rate reaffirmed.
  • Property tax of 0.18% of property value from July 2013, rising to 0.25% for balance of property value over €1 million.
  • Pension levy to cease after 2014, as per original legislation.
  • Tax relief for pension contributions remains at the marginal rate, subject to a new restriction of pension income of €60,000 per annum. Details to be confirmed.
  • Withdrawals from pension scheme AVC’s will be allowed before retirement for the first time.
  • DIRT tax increases from 30% to 33%.
  • Capital Acquisitions and Capital Gains tax also increases from 30% to 33%. CAT threshold reduced by 10%.
  • PRSI to be applied to various sources of unearned income, such as dividends, interest and rental income.
  • Weekly PRSI income exemption limit of €107 abolished.
  • Reduced rate of USC for those over 70 with income in excess of €60,000 will cease.
  • Child benefit reduced by €10 per month for first 2 children, €18 for the third child, and €20 for subsequent children.
  • Film relief extended to 2020.
  • Mortgage interest relief to cease on 31/12/2012.
  • Maternity benefit will be taxable for the first time.
  • Cigarettes, beer & whiskey +10cents, wine + €1 per bottle.
  • Petrol & diesel duty remain unchanged.
  • R&D tax credit doubled to €200K.
  • National Pensions Reserve Fund to develop a range of funding supports for SME’s.

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