WENTWORTH Budget 2023 Summary
On Tuesday 27 September 2022, Minister for Finance, Mr. Paschal Donohoe T.D., delivered his Budget 2023 speech to the Dáil.
Budget 2023 is unique due to its “budget within a budget” structure. It includes a total of €4.1bn in one-off measures, designed to help families, individuals and businesses deal with the rising cost of living, accompanied by the standard budgetary measures for 2023 worth €6.9bn. This brings the total size of Budget 2023 to €11bn.
In addition, there will be a further €300m in public service support measures funded from the Contingency Reserve Fund.
Some of the key changes announced in Budget 2023 include;
Personal
- Standard rate bands to be increased by €3,200.
- Personal tax, employee tax and earned income credits increased from €1,700 to €1,775.
- 2% USC rate band to be increased from €21,295 to €22,920.
- Every household will get €600 in electricity credits in three payments of €200, the first before Christmas and two in the new year.
- Additional once-off measures aimed at carers’, students and social welfare recipients.
Business
- Reaffirmation of Ireland’s commitment to the 12.5% corporation tax rate for businesses with a consolidated group turnover below €750m (15% where turnover is above €750m).
- A Temporary Business Energy Support Scheme is being introduced to assist businesses with their energy costs.
- Small Benefit Exemption is being increased from €500 to €1,000, with two vouchers permitted in a single year.
- R&D Tax Credit system of offset against corporation tax and payment in three instalments is being changed to a new fixed three-year payment system.
- KDB is being extended for 4 years, allowing relief for accounting periods commencing before 1 January 2027.
Property
- A new rent tax credit valued at €500 per year has been introduced for taxpayers who are paying rent on their principal private residence.
- Help to Buy scheme to be extended rates until the end of 2024.
- The Living City Initiative is being extended for a further five years until the end of 2027.
- The eligible expenditure cap for pre-letting expenses will increase from €5,000 to €10,000 per property with effect from 1 January 2023. Additionally, the time limit for which a property must be vacant has been reduced from 12 months to 6 months.
- A new Vacant Homes Tax (VHT) will be introduced in 2023. The tax will apply to residential properties which are occupied for less than 30 days in a 12-month period.
- In relation to the Residential Zoned Land Tax announced in Budget 2022, maps are currently being prepared by Local Authorities who will publish their first draft maps on the 1st of November this year.
- The Residential Development Stamp Duty Refund Scheme has been extended to the end of 2025.
- To fund the Defective Concrete Products redress scheme a levy of 10% will be applied on concrete blocks, pouring concrete and certain other concrete products with effect from 3 April 2023.
Farming
- A three-year scheme of accelerated capital allowances for farmers for the construction of slurry storage facilities is being introduced
- Two special stock relief measures, for registered farm partnerships and for young, trained farmers are being extended until the end of 2024.
- Young Trained Farmer Stamp Duty Relief gives a full exemption from stamp duty to young trained farmers when they acquire (by gift or purchase) farmland, and associated buildings, including farmhouses it is now planned to be extended until the end of 2025.
- Farm Consolidation Stamp Duty Relief which provides that a 1% rate of stamp duty on acquisitions and disposals of agricultural land where the land transactions involved qualify for a ‘Farm Restructuring Certificate’ from Teagasc, is planned to be extended until the end of 2025.
- It is intended the CGT Farm restructuring relief, which provides relief from CGT for land transactions qualifying for a ‘Farm Restructuring Certificate’ from Teagasc, and is currently due to expire at end 2022, will be extended to end December 2025.
- The flat-rate addition for farmers (which compensates non-VAT registered farmers for irrecoverable VAT on their input costs) to decrease from 5.5% to 5.0% from January 2023.
We have summarised the key points from Budget 2023 which we feel are relevant to our private and corporate clients and contacts. We hope you find our WENTWORTH Budget 2023 Summary useful and informative.
We would be delighted to discuss any queries you may have in relation to the impact Budget 2023 will have on you and your finances, just give us a call to arrange a meeting with a member of our tax team.
Please click on the link below for our expert analysis.
