With a particular focus on homes, Stephen Hamilton examines Budget 2024 changes in todays (15/10/23) Irish Examiner
More than 130,000 homeowners may feel grateful when mortgage interest tax relief kicks in next year.
The budget unveiled a range of changes, bringing good tidings for some and leaving others scratching their heads.
You may already be tired of hearing about the measures at this stage, but there is still much to ponder on the way the measures will affect the housing market.
Over 130,000 mortgage holders who have weathered the storm of increased interest rates, over the last year, can find some solace in Budget 2024.
• The mortgage interest tax relief for more than 130,000 mortgage holders is welcome and the homeowners will be grateful next year when completing their 2023 tax returns, but it is important to remember that they will not get any immediate relief.
• The Help to Buy scheme has been a welcome ally for first-time homebuyers since 2020 and has now been extended, as had been expected, to 2025.
• The €30,000 tax rebate for home seekers is a positive measure, but only applies if the borrower can find a new home in the Irish property market. The scheme has also been extended for people purchasing a local authority affordable home.
• All taxpayers, including homeowners, will receive a modest financial boost as personal PAYE and earned income tax credits increase by €100 to €1,875.
• The standard rate tax band threshold expands by €2,000 to €42,000, and there are changes to USC rate bands. Those changes will all help to putting more money in the pockets of hard-pressed consumers and potential homeowners.
• Renters got a small boost with an increase in tax credits from €500 to €750. The increment is a friendly nod to those grappling with the challenges of rising rents and living costs.
• The Government aims to keep landlords from selling their rental properties by introducing tax breaks ranging from €600 to €1,000, increasing annually until 2027. The incentive is intended to maintain stability in the rental market, but there are concerns about the effectiveness of the measure which is designed to keep landlords in the market.
• Owners of vacant properties face a financial nudge, as the vacant homes property tax increases from three to five times the existing local property tax. This may be bad news for those with idle properties, but it’s a strategic move to encourage bringing more properties into the rental or sales market.Winners and losers
There are other winners and losers from the budget.
Among the winners are parents with free schoolbooks up to the Junior Cert year, and pensioners and social welfare recipients receive an extra €12 per week.
The age cap for retirement relief increases from 66 to 70, benefiting those looking to pass on farming, businesses, or property wealth to the next generation.
Parents and pensioners will be happy with these budget benefits and the Government will be hoping this not-so-subtle nod will bear fruit for the coalition parties in the upcoming general election.
One loser is health spending. The absence of substantial solutions to plug the shortfalls in the health budget raises concerns about the Government’s commitment to addressing healthcare challenges in the coming years.
Meanwhile, increases in the the bank levy will likely lead to an increase to €200m.
It’s not certain that the increase in the levy will help settle lingering public resentment towards the banks following the bailouts of over 12 years ago.
The main banks are raking in profits and this meagre increase in the banking levy will likely do little to appease public sentiment towards the banks.
Stephen Hamilton is managing director at MortgageLine.ie
Link to article at IrishExaminer.ie