Budget 2025 Highlights

 

The budget included spending increases and tax cuts amounting to over €8.3 billion, consisting of core expenditure of under €6.9 billion and a tax package of more than €1.4 billion.

It also included once-off cost of living measures of €2.2 billion, net of revenues, bringing the total package to €10.5 billion. In this article, we summarise some of the key highlights from Budget 2025.

 

Budget 2025 Highlights

The following are some of the key outcomes from this year’s budget:

 

Education

The existing free schoolbooks scheme has been extended to now include all primary and secondary pupils, and Junior and Leaving Cert exam fees will be waived.

The hot meal programme will also be expanded to all primary schools in 2025.

Additionally, a €15 million budget was announced for the recruitment of 768 new teachers to support children with special needs, and a further €18 million for hiring 1,600 new Special Needs Assistants (SNAs).

For third-level, the previous €1,000 cut to the student contribution will be extended to the new academic year. There is also no increase in the postgraduate tuition fee contribution by €1,000 for grant recipients.

Lastly, a once-off reduction of 33% will apply in the contribution fee for higher education apprentices.

 

Health

An overall €25.76 billion package will see 495 new beds for the health service, and an increase in the numbers working in the health service, not including disability services.

This will reach over 130,000 whole-time equivalents and represents an increase of 27% since 2019.

The Government has also added 600,000 home support hours.

This is in addition to increased access to free IVF and hormone replacement therapy (HRT) free of charge.

 

Housing

A new, third rate of stamp duty (6%) is to be introduced for properties over the value of €1.5 million. Further information about the breakdown and conditions of this can be seen here.

The Help-to-Buy scheme, for first-time buyers of new homes, was given its largest extension to date and is now set to continue until 2029. Further information about this scheme can be found here.

The rental tax relief for private residential tenants has been increased to €1,000 for single-assessed individuals and €2,000 for jointly assessed individuals. Parents of student children in rent-a-room or digs-type accommodation are also able to claim the rent tax credit.

The vacant homes tax rate has been increased, meaning that it is now seven times the basic Local Property Tax (LPT) rate. Vulture funds and other investors purchasing multiple properties will now pay 15% stamp duty.

 

Households & Personal Finance

The standard rate of tax has been increased to €42,000 from the previous €44,000. Personal tax credit, employee credit and earned income credit has also increased by €125.

The Universal Social Charge (USC) rate of 4% has been reduced to 3% with a starting threshold of €27,372. If you are over the age of 70 with income of less than €70,000, a USC rate of 2% applies.

The minimum wage has also been increased to €13.50 an hour, an 80 cent increase. All social welfare benefits are to also be increased by €12 per week.

There will also be two energy credits, worth €125 each that will be automatically deducted from electricity bills. One of these will occur before Christmas, and the other in early 2025.

 

Businesses

An increase from €1,000 to €1,500 was announced for any employer who wishes to provide limited non-cash benefits or rewards to their workers without the payment of income tax, PRSI and USC.

The Employment Investment Incentive, the Start-Up Relief for Entrepreneurs and the Start-Up Capital Incentives have been extended until the end of 2026.

Investors can now claim relief from €500,000 up to €1 million under the Employment Investment Incentive. The relief available under the Start-Up Relief for Enterpreneurs has risen from €700,000 to €980,000.

The VAT registration thresholds that apply to the supply of goods and services have been raised to €85,000 and €42,500 respectively.

Due to the growth in employment and increased employers’ PRSI receipts, the National Training Fund (NTF) is in surplus. With this in mind, a six-year programme to spend €1.5 billion has been announced to increase the number of healthcare and veterinary places, as well as an increase in certain PhD stipends and €78 million to further grow the craft apprenticeship system.

 

Transport

Reduced public transport fares (by 20%) are to continue in 2025, with free public transport for the under 9s, and over 70s still able to bring another person on public transport free of charge.

Petrol and diesel prices are to rise via an increase in Carbon tax rate per tonne of CO2 emitted for petrol or diesel, and will go up €7.50, from €56 to €63.50 from 9th October 2024.

The levy on all motor insurance policies which covered the insolvency of rogue insurers was announced, which added 1% to all renewals, is to conclude, benefitting up to 2.2 million policyholders.

Electric commercial vehicles will qualify for the €200 rate under the Vehicle Registration Tax (VRT) regime.

Company car buyers will only have to pay vehicle registration tax (VRT) on the price of a vehicle above €45,000. Additionally, there is a benefit-in-kind concession on home-charger installations.

 

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