Boylan & Dodd 2009 Budget Highlights



Budget Day October 14th 2008...Budget Day. Highlights of the emergency 2009 budget are presented here.

2009 Budget Highlights
Income Tax
  • Standard Rate UNCHANGED at 20%.
  • Top Rate UNCHANGED at 41%.
  • INCOME LEVY: A new levy on Income Tax of 1% will apply to ALL income with no credits, reliefs or deductions. If you earn over €100,100, the levy rises to 2%, though this is only chargeable on the amount over €100,100.
Tax Reliefs
  • First-time buyer Mortgage Interest relief: this has been increased from 20% to 25% in Years One & Two, and to 22.5% in Years Three-Five.

    Note this increased relief will apply to new First-time buyers AND if you bought as a First-time buyer in the last four years.

  • Medical Expenses - it will now be possible to only claim relief at the standard tax rate of 20%. It is also likely the amount payable on the drug subsidy scheme will be increased.

  • Pension Relief - the limit at which tax relief applies is being decreased to €150,000 from €275,239.

Tax Bands

Increases as follows:

2008 20% Band 2009 20% Band Increase
Single €35,400 €36,400 €1,000
Married One Income €44,400 €45,400 €1,000
Married Two Incomes* €70,800 €72,800 €2,000


*= With a maximum transferability between spouses of €44,400 in 2008 and €45,400 in 2009.

Other Relevant Measures
  • Car parking - If your employer supplies you with a car parking space in a major urban centre, there is an extra levy of €200.

  • Bicycle Relief:

    Basically, your employer can provide you with a bike and equipment up to €1,000 tax free every few years.

  • Air Travel - new tax of €10 per journey, though a lower rate of €2 will apply to many flights within Ireland.
  • Wine - up by 50 cent a bottle.
  • Cigarettes - up by 50 cent (including VAT) on a packet of 20.
  • Motoring - Eight cent on a litre of petrol from midnight on 14 October 2008.
  • Landlord tax - to be collected by the Local Authorities and is being set at €200 per dwelling.
PRSI
  • PRSI employee contribution ceiling will increase from €50,700 to €52,000 from 1 January 2009.


Community

  • Pensions: - Contributory and Non-contibutory Old-Age pensions up by €7 from 1st January 2009.

  • Childcare: Child Benefit -
    - General increase of €2 per month however, children over 18 will not be eligible from 2010, with a half-payment in 2009.

  • Basic social welfare rates: - will be increased by €6.50 per week from the start of January 2009.

Capital Gains Tax

  • CGT Rate
    The rate of CGT is being increased to 22% from 20% - from midnight on 14 October 2008.
Value Added Tax

  • The standard rate of VAT will be increased from 21 to 21.5 per cent from 1 December 2008

Business, Corporate and Taxed Based Investment Schemes

  • CT Rate: No change in the standard CT rate of 12.5%.


  • R+D: The R+D tax credit is being increased to 25%.
  • New start-up companies: which commence trading in 2009 will be exempt from tax, including capital gains, in each of the first three years provided that their CT due in the year does not exceed €40,000.



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