Taxback.com Summary of Budget 2012 (Day 2) Developments

So the much anticipated Budget 2012 is now over. Finance Minister Michael Noonan delivered the second part of the Budget in between plenty of swipes at the previous Government. He opened with the sobering statements that ‘thousands of people are sinking into poverty, emigration has returned and unemployment is far too high’ but said that the primary purpose of this Budget is to create jobs ‘in the short term, medium term and long term’.

He also spoke of wanting to encourage people to transfer family farms to the younger generation and unveiled measures related to this including the maintenance of full relief for individuals aged 55 to 66 and the imposition of an upper limit for transfers after the age of 66. The summary of Budget 2012 is as follows:

• No increase to income taxes
• VAT up 2% to 23%
• Lower exemption threshold for Universal Social Charge raised from €4004 to €10,036
• Cigarettes up by 25 cent from midnight tonight
• Petrol increased by 1.4c per litre and diesel increased by 1.6c per litre from midnight tonight
• Extension of 1% betting duty to remote betting
• No immediate increase to excise on alcohol but this is scheduled for review in 2012
• Mortgage interest relief rising to 30% for first time buyers who bought between 2004 and 2008 and extension of current rates for buyers in 2012
• Capital Acquisition tax and Capital Gains tax rising from 25% to 30% and reduction of Group A tax free threshold to €250,000
• DIRT rising from 27% to 30%
• Corporation tax remaining at 12.5%
• Reductions in stamp duty for the transfer of commercial property
• Introduction of assignee relief programme and Foreign Earnings Deduction
• Introduction of household charge of €100
• Amendments to the Domicile levy in order to make it more difficult to escape
• Motor tax increases across all categories
• Removal of employer PRSI relief on employee pension contributions

We’ll be back with a more in-depth analysis of the full Budget soon.