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Budget 09 & Supplementary Budget 09
| Callely Budget 2009 |  437Kb |
The Minister for Finance, Mr. Brian Lenihan, delivered his Supplementary Budget for the year 2009 on Tuesday 7th April, 2009.
Six steps to restore and renew our economy, these being:
• Stability of public finances
• Restoration of credit flow from the banking system
• Regain our external competitiveness
• Protection of employment
• Support and stimulate economic confidence
• Restore our reputation abroad
Income Tax
Income Levy
The levy on Gross Income chargeable to 2% on annual gross income up to €75,036,
4% on gross income is deemed to be prior to any provision for Capital
Allowances. The minimum threshold has reduced to €15,028.
There were no changes announced in the areas of tax credits or bands but there have
been some changes in relation to PRSI and health levies as set out below.
PRSI and Health Levies
2009 2008
€ €
Health Levy
Lower rate (entry threshold
€26,000 p.a.) 4% 2%
Higher rate 5% 2.5%
The higher rate threshold has decreased to €75,036 from €100,100. The PRSI ceiling
for employees has also increased from €52,000 to €75,036.
Mortgage Interest Relief
The time period for which Mortgage interest relief has been capped at 7 years from
commencement of the mortgage. This applies to all owner-occupiers including first
time buyers.
Investment Property interest relief
Tax deduction allowable on interest paid on loans for residential investment
properties. 75% of the interest can now only be claimed as a tax deductible expense.
Profits from the sale of residential development lands
The special rate of income tax of 20% on the sale of residential development land has
been abolished and will now be taxable at the marginal rate of Income Tax or at a
corporation tax rate of 25%.
Accelerated Capital Allowances Schemes
A number of capital allowance schemes have been terminated, with the exception of
Palliative care units and childcare facilities.
Capital Taxation
The rate of Capital Gains Tax has increased to 25% with immediate effect. Capital
Acquisitions Tax has also increased to 25% with thresholds for CAT reducing by
20%.
Deposit Interest Retention Tax
The rate of DIRT has increased from 23% to 25% on ordinary deposit accounts with
immediate effect. Some special accounts will be subject to a rate of 28%.
What does it mean for your wallet?
A single person earning €30,000 per annum will be worse off by €75 per month.
A married couple, with one income earning €50,000 per annum will be worse off by
€125 per month.
A married couple, two incomes earning €100,000 per annum will be worse off by
€250 per month.
A single person earning €300,000 per annum will be worse off by €1,229 per month.
Stamp Duty
A trade in scheme has been introduced where under the scheme a person purchasing a
new house or apartment can trade in their existing property with the seller. The seller
will not be liable to stamp duty until they sell the “traded in property”.
Social Issues
The Minister has not announced any changes in relation to child allowance, old age
Pensions and social welfare payments.
However, the early child benefit has been halved and will be abolished at the end of
2009. A new scheme known as the “Pre-school Scheme” has been announced which
will replace this. Details will be provided in the Finance Bill.
All child benefit will be means tested as from 1 January 2010.
Social Welfare bonus payments will not be paid in December 2009.
Payments under the rent supplement scheme will be reduced, details of which will be
Available in the Finance Bill.
Excise duties have been increased in the areas of cigarettes and diesel only.
National Asset Management Agency
The Minister has announced the set up of a new agency to purchase assets from
Banking institutions estimated to have a book value of €80 - €90 billion. These
Will be purchased at a significant discount from the institutions and relate mainly to
the property sector. The Minister has promised that the agency will be run on a
commercial basis and all debts will be pursued rigorously. This initiative will be
developed and implemented within the common EU framework detailed in the
European Commission Guidance on the Treatment of Impaired Assets.
Public Sector Reform
The Minister announced an early retirement scheme for public sector workers at the
age of 50. They will be entitled to 10% of their lump sum entitlement immediately
with the balance due at normal retirement age.
Click here for Supplementary Budget April 2009 Documents
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