News 7

April 2009 supplementary Irish Budget

7 April 2009

DG International Tax Summary

Personal tax	Income levy rates doubled and income bands lowered Health levy rates doubled and income band lowered Employee PRSI ceiling increased DIRT increased to 25% Mortgage interest relief available for first 7 years only Interest relief on residential rents reduced to 75%
Business Tax	Introduction of tax relief for the capital cost of acquiring Intellectual Property 20% rate for dealing in residential development land abolished Capital allowance based reliefs for private hospitals and nursing homes abolished
Capital Taxes and Stamp Duty	CGT increased to 25% CAT increased to 25% CAT thresholds reduced by 20% Stamp Duty ‘trade in’ scheme for property introduced
VAT	New VAT margin scheme for second-hand car dealing

Taxation on Savings

From 8 April 2009, the rate of retention tax applying to deposit interest earned is increased from 23% to 25% whilst the rate of tax applying to life assurance policies and investment funds is increased from 26% to 28%.

Mortgage Interest Relief
From 1 May 2009, mortgage interest tax relief will be discontinued for any mortgage after 7 years.

Interest Relief on Rented Residential Property
With immediate effect, the level of tax relief investors can claim in respect of loan interest on residential rental properties is being reduced to 75% of the interest incurred. Commercial properties are not affected.

Income from Dealing in Residential Development Land

The 20% rate applied to trading profits from dealing in or developing residential land is abolished. New rules for the treatment of losses will be introduced.

Property Tax

The Minister announced a number of potential taxation measures which may be introduced in the December 2009 Budget including a Property Tax, Carbon Tax and Child benefit to be means tested.

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