Budget 2025: Summary of tax reliefs and supports – and what it means for you

Budget 2025 features a wide range of tax reliefs and one-off welfare supports and comes amid mounting speculation the Coalition will move to call a general election before the end of the year.

Fine Gael said the average worker will be more than €900 better off per year as a result of the measures announced by Finance Minister Jack Chambers and Expenditure Minister Paschal Donohoe.

Among the most noteworthy measures announced in the Budget are:
– A “baby boost” payment of €420 for newborns;
– A €12 increase to welfare and pension payments;
– A €250 increase in the rent tax credit, bringing it to €1,000;
– The threshold for paying the higher rate of income tax will increase by €2,000 to €44,000;
– A reduction in the Universal Social Charge (USC) from 4% to 3%;
– The national minimum wage will increase by 80c to €13.50 from January 1;
– An increase in stamp duty on the bulk buying of homes from 10% to 15%;
– A reduced VAT rate of 9% for gas and electricity has been extended until April 30;
– The cost of a packet of cigarettes is to increase by a euro to €18.05;
– The cost of a typical disposable vape will rise from around €8 to €9.23 including VAT.

Other noteworthy measures include increased access to IVF free of charge, and the introduction of free hormone replacement therapy from January, which could save women between €360 and €840 a year.

The Free Schoolbooks initiative to all transition and senior cycle pupils, and the Hot School Meals programme will be extended to all primary schools, including a pilot-programme for school holidays.

The €1,000 reduction in the student contribution will remain and funding will also continue for the continued school-transport fee reduction and State exam fee waiver.

An exemption from income tax, capital gains tax and capital acquisitions tax on payments made to the women impacted by the failures in the CervicalCheck scandal was also announced.

Minister Chambers also suggested work would commence to investigate an income volatility scheme which farmers have long been calling for, as well as possible tax relief for people who use gyms or other fitness centres ahead of the next budget.

Another measure sees €13 million allocated to help integrate Ukrainians newly arrived in communities.

Mr Chambers and Mr Donohoe said concerns about price rises of 19% between January 2021 and August this year underlined why they were announcing a significant €2.2bn cost-of-living package. These include:
– Two €125 energy credit payments;
– Two double Child Benefit payments;
– A €400 lump sum for those in receipt of the Working Family Payment;
– A €300 lump sum for those in receipt of the Fuel Allowance;
– A €200 lump sum for those in receipt of the Living Alone Allowance.

At the outset of his maiden Budget speech, the 33-year-old Finance Minister said the economy is in a strong position.

Mr Chambers told the Dáil: “The outcomes of the progress made were not inevitable. It is a result of the drive and the focus of this Government to provide a better future for everyone and in the careful management of our public finances.

“I believe Budget 2025 puts in place the policies and measures to continue this positive trajectory and to ensure that all our people see a promising and hopeful future in this country.”

Mr Chambers used the speech to signal the Government will use €14.1 billion of backdated taxes due from Apple to address challenges in “housing, energy, water and transport infrastructure”.

Mr Donohoe said his officials would begin work on developing an investment framework for using the Apple funds, ensuring there was co-ordination with investments already planned through the National Development Plan.

He also said he was making €3 billion from the sale of the state’s shares in the Allied Irish Banks (AIB) available for infrastructure spending.

Mr Chambers said the Government wanted to give hope to young people that they will be able to afford their own home in Ireland.

“Budget 2025 puts the country on a firm putting for the future,” he said.

“Progressivity, fairness and catalysing real opportunity for the future have been at the core of this Government’s budgets and these principles have been central to how Budget 2025 was being designed.”