Budget 2017 in Review
We reviewed the details of Budget 2017 to provide you with the relevant information relating to pensions and your personal finance. Normally our focus is on pension matters and over the last number of years there has been much to report and discuss, but in this budget there are no changes to private pensions.
It was however announced that State Pensions will increase by €5 per week. This increase is not due to take effect until March 2017.
Some of the other main items of interest are outlined as follows:
- The DIRT rate is to be reduced from 41% to 39% in 2017 with a further annual 2% reduction until 2020 when it is reduced to 33%. There was no reference to a reduction in the exit tax applied to life assurance policies. The publication of the Finance Bill will hopefully provide further clarity on this.
- There has been a reduction of 0.5% to the three lower USC rates.
- For the self-employed there was announced an increase in the earned income tax credit from €550 to €950. This applies to self-employed and proprietary directors who are unable to claim €1,650 PAYE tax credit.
- The tax free thresholds for Capital Acquisitions Tax have been increased. In particular the Class A Threshold (applying to children inheriting from parents) has been increased from €280,000 to €310,000. Class B and C have been increased marginally.
In relation to Property, an initiative has been announced in this budget, to be known as the Help to Buy Scheme. This scheme will be available to first time buyers of newly built homes. It will be provided by way of a tax rebate of income tax paid over the previous four years. It will be paid up to a maximum of 5% of the purchase price, capped at €400,000 which the equivalent to a maximum rebate of €20,000. The house is capped at €600,000.
Mortgage Interest relief, which is a tax relief at source in respect of mortgage interest is to be extended beyond December 2017 out to 2020.
There was also the introduction of a single affordable childcare scheme, which will not come into force until September 2017.
Much of the information pertaining to this budget came to us via the media before the actual announcement. However, there are certainly some finer points that will be clarified upon publication of the finance bill.
Here to help you navigate your way to financial security.
The Milestone Advisory team are qualified financial services consultants. We specialise in helping professionals in the construction sector and related industries. Our team will work with you to review your finances, explaining your options in clear English.
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For further information please contact Susan O’Mara via email or phone: (01) 406 8020. Milestone Advisory DAC t/a Milestone Advisory is regulated by the Central Bank of Ireland.