Ireland

Key announcements from Budget 2018

Finance Minister Paschal Donohoe holds his tax and expenditure reports outside Government buildings in Dublin before delivering his budget speech 
Finance Minister Paschal Donohoe holds his tax and expenditure reports outside Government buildings in Dublin before delivering his budget speech  Finance Minister Paschal Donohoe holds his tax and expenditure reports outside Government buildings in Dublin before delivering his budget speech 
By Deborah McAleese and Press Association

Taoiseach Leo Varadkar said there would be "no fireworks" and no "big bonanza" as Budget 2018 was unveiled today.

Here are some of the key announcements:

  • Spending on health to increase by €685 million (£612 million), bringing the total budget for the Health Department to €15.3 billion (£13.6 billion).
  • An additional 1,800 staff across the health sector
  • A reduction in prescription charges for all medical card holders under 70 from €2.50 (£2.23) to €2 (£1.78) per item. The monthly cap drops from €25 (£22.36) to €20 (£17.89).
  • The excise duty on a packet of 20 cigarettes will rise by 50 cents (44p).
  • Duties on alcohol go unchanged.
  • There will be no changes in the price of diesel or petrol.
  • A sugar tax from April 2018 will see an extra 30 cent (26p) per litre of tax on drinks with over 8g of sugar per 100ml. There will be a reduced rate of 20 cent (17p) per litre on drinks with between 5g and 8g of sugar per 100ml.
  • Education spending will reach over €10 billion (£8.9 billion) in 2018. There will be 1,300 more posts in schools next year and the pupil-to-teacher ratio will reduce to 26:1.
  • A €1.7 billion (£1.5 billion) investment in special education, with more than 1,000 new special needs assistants being recruited before September 2018.
  • In a bid to address the homelessness crisis, €1.8 billion (£1.6 billion) will be allocated for housing. Next year, 3,800 new social homes will be built and there will also be an increase to the housing assistance scheme by €149 million (£133 million).
  • An extra €500 million (£447 million) for direct building programme will see 3,000 additional new build social houses by 2021.
  • Stamp duty on non-residential property is being increased to 6% from midnight on Tuesday.
  • A new agency, Home Building Finance Ireland, to use Nama's experience and provide cheap loans to developers was announced.
  • Mortgage interest relief for people with loans taken out in period 2004-2012 is being continued to 2020 but at just 75% the rate in 2018, 50% in 2019 and 25% in 2020.
  • All weekly social welfare payments to be increased by €5 (£4.47) starting from the last week of March. An 85% Christmas bonus will be paid this year.
  • Threshold for the family income supplement will rise by €10 (£8.94) per week for families with three children. €2 (£1.78) per week rise in the rate of the qualified child payment.
  • The home carer tax credit is to increase by €100 (£89) this year to €1,200 (£1,073) per year.
  • For the self-employed, the earned income credit will increase by €200 (£178), bringing it to €1,150 (£1,128) per year from next year.
  • The threshold at which people enter the higher, 40% rate of income tax will rise from its current level of €33,800 (£30,242) by €750 (£671) for a single person to €34,550 (£30,914).
  • An extra 800 gardai and 500 civilians will be recruited next year. There will be €63 million (£56 million) more for Justice to develop a "modern police force".
  • VAT rate on sunbed services increases from 13.5% to 23% due to link to cancer from use of sunbeds.
  • The vacant site levy, due to take effect from 2019, will increase from 3% to 7% in 2020.
  • Brexit loan scheme of up to €300 million (£268 million) is being made available to SMEs.
  • VAT rate for tourism and services sector is being left unchanged at 9%.
  • The State's 12.5% corporation tax rate remains unchanged
  • Help to buy scheme for first-time buyers, which offers an income tax refund of up to €20,000 (£17,893) for buyers of newly-built homes, is being retained.
  • A Rainy Day Fund will be established in the coming year, with at least €1.5 billion (£1.34 billion) to be transferred to it from the Ireland Strategic Investment Fund.