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Budget 2012

How will the budget affect you?  Here are the main changes:-

  1. Universal Social Charge (USC) – those whom earn a total income for the year of €10,035 or less will be exempt from paying the USC.  This has been increased from a total income of €4,004 in 2011
  2. Mortgage Interest Relief – for first time buyers who purchased from 1st January 2004 up to 31st December 2008 will now be entitled to relief on qualifying loans of 30% for tax years 2012 to 2017
  3. DIRT increased from 27% to 30% with effect from 1st January 2012
  4. Capital Gains Tax (CGT) increased from 25% to 30% on disposals made on or after 6th December 2011.  An CGT exemption has been introduced for properties purchased from 7th December 2011 until the end of 2013 where that property is held for a period of at least 7 years, on the gain attributable to that 7 year holding period.
  5. Capital Acquisitions Tax (CAT) increased from 25% to 30% on gifts and inheritances received from 7th December 2011.  The tax free threshold for Group A has been reduced from €332,084 to €250,000
  6. VAT – the standard rate increases from 21% to 23% with effect from 1st January 2012.  The 13.5% & 9% rates remain unchanged
  7. Taxation on illness benefit – the current exemption of 36 days (6 weeks) has been removed with effect from 1st January 2012
  8. Tobacco Products – rates are increased with effect from midnight on 6th December by 25% inclusive of VAT on a packet of 20 cigarettes with pro rata adjustments on other tobacco products
  9. Petrol/Diesel – the rates will increase from midnight 6th December by 1.5 cent on a litre of petrol and just over 1.5 cent on a litre of diesel
  10. Motor Tax – increases in the rates of motor tax will take effect from 1st January 2012.  Please see attached link for details of the proposed increases across all categories http://www.budget.gov.ie/Budgets/2012/Documents/Taxation%20Annexes%20to%20the%20Summary%20of%202012%20Budget%20and%20Estimates%20Measures.pdf
  11. Household Charge of €100 has been confirmed for 2012.  For those on mortgage interest supplement or those residing un unfinished ‘ghost’ estates the charge will be waived
  12. Stamp Duty – on non residential property a lower rate of 2% (reduced from 6%) has been introduced and will apply to the entire amount of consideration.  The current exempt threshold of €10,000 has been abolished
  13. Children’s Allowance – reduced by €19 per month for 3rd child and by €17 per month for 4th and subsequent children
  14. One Parent Family Allowances –  stopped for children over 12 for new applicants anf for those over 7 from 2014
  15. Fuel Allowance – reduced from 32 weeks to 26 weeks
  16. College Registration Fee – increased by €250 to €2,250
  17. Back to School clothing and footwear allowance – abolished for under 4’s
  18. Student Grants to fall by 3%
  19. Teachers – 950 jobs to go – 250 in primary and 700 in post primary
  20. Health Insurance – premiums will increase by a possible 50% due to a charge for private beds in public hospitals
  21. Free GPs for those on long-term illness scheme
  22. Drug Refund Scheme – increased from €120 to €132 per month

For any queries in relation to any of the above points or anything covered in the Budget’s part 1 & 2 please contact Lorraine on 087 2608988 or email lorraine@jigsawfinancialsolutions.ie

 

 

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