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.