PKF-FPM Budget Summary 2017

The 2017 budget was announced on the 11th October 2016 by Finance Minister Michael Noonan, the minister announced a number of important changes; namely the increase in the tax credit for small business owners and self-employed people from €550 to €950 and a reduction in the lower and middle rates of USC which now stand at 0.5%, 2.5% and 5%. He also announced the phased introduction of an increase in deductibility of mortgage interest relief for landlords, it will be increased to 80% and by 5% per annum thereafter until restored to 100%, to assist new home owners trying to purchase their first home he announced a 5% income tax rebate (over 4 years) for first time buyers of newly built homes, this rebate is capped at €20,000 and houses costing over €600,000 will not obtain any rebate.

In other taxes the Minister confirmed the corporation tax rate of 12.5% would remain, as would the 9% VAT rate, in relation to capital taxes the CAT lifetime tax-free threshold for gifts & inheritances from parents to their child has been increased from €280,000 to €310,000. Also announced was a reduction in the special CGT rate on disposals of a part or whole of a business up to a value of €1million, this was introduced in last year’s budget at a rate of 20% and this has now been reduced to 10%.

For further details on the announcements in this year’s budget please see the attached.