The Circuit Court has approved (May 2023) a Personal Insolvency Arrangement for a couple, to fix their mortgage interest rate at 2.5% for 25 years. The mortgage is being managed, for a vulture fund, since they got into difficulty. A ray of light for those who are struggling with mortgage repayments!
Taxation of non-resident landlords has changed with the introduction of Collection Agents to interface with the Revenue Commissioners.
Benefit-in-kind on company cars has increased as the government attempts to push people towards green energy. Supplies of cars and components are low resulting in rising prices.
With inflation riding high, the ECB continues to push its interest rates higher. Its main rate is 3% (February 2023). And more increases are promised. Unfortunately the impact for most people is on their mortgage repayments, which are unavoidable and out of their control. Tracker mortgages were impacted first. Variable rates are being hit too.
The National Minimum Wage increased to €11.30 from 1 January 2023 in Ireland. The Living wage, which is not a statutory entitlement, in thought to lie between €13 and €14.
From 2023, a borrower can apply for a mortgage of up to 4 times annual income. If the property costs €480,000, a deposit (combined with government grant) of €100,000, requires a mortgage of €380,000. At a variable interest rate of 4.5%, it would cost about €1,900 a month, over 30 years.
Over 20 years, it would cost about €2,400. Fixed interest rates are lower, but have early termination fees. If interest rates rise to 6% (variable), it would cost about €2,300 per month over 30 years, and €2,700 over 20.
Budget 2023 leaves most people better off with more tax cuts than we've seen in years. Perhaps not enough to counter inflation!
From 2022 employers can give staff non-cash benefits (typically vouchers) of up to €1,000 without tax. Previously the limit was €500.
A rent tax credit of €500 can be claimed by those renting the homes they live in. It applies from 2022.
Tax credit for business owners facing higher energy bills.
The government is considering introducing a third rate of income tax (30%) to ease the burden for middle-income groups.
Personal Tax Credits reached €1,700 for a single person in 2022, having been cut from €1,830 after the 2008 Global Downturn. Ordinary workers are paying for the mistakes of the past, while our purchasing power is eroded by inflation.
European Central Bank increases interest rates by 0.5% which is expected to raise bank interest rates, including homeloans.
First Home Scheme launched by Government to help first-time-buyers bridge the gap if they cannot raise a big enough mortgage.
90% of people over 65 own their home. Only 65% of 35-44 year-olds can expect the same, and one-in-two 25-34 year-olds.
The 2023 Cost of Living Budget will provide a modicum of relief to increase tax credits and tax bands.
Average Mortgage interest rate is about 3%. Monthly repayments on €100,000 over 25 years would be €474. If interest rates rise to 4%, repayments become €528. Time to consider the options!
Interest rates are rising globally due to increasing financial pressures.
Irish inflation has reached 9.6% (July 2022). A little inflation (just under 2%) is good. 9.6% is a cause for concern!
A New Living Wage (€12.17p.h.) is due to replace the National Minimum Wage (€10.50) by 2026, being phased in from 2023.
New Workplace Pension Scheme should be in place by 2024, funded by employees and their employers.
Employers can give tax-free vouches, up to €1,000 in a year, to employees. It can be split over no more than two payments.
Use the Bike to Work Scheme to buy a tax free bike. If the employer buys the bike, there is no BIK. Or you can choose salary sacrifice and get the tax back. For peddle bikes get up to €1,250; for e-bikes it is up to €1,500, without tax.
PAYE workers, with investment income, are subject to interest and penalties if they don't make arrangements to pay the extra tax.
Tax on small investment income can be paid by reducing PAYE credits, if agreed with the Revenue Commissioners.
four years to claim back tax; don’t wait until it is too late.
Top up your pension fund by October and you can claim back tax for the previous year.
funding is one of the most tax-efficient ways to save.
An employer's contribution to a pension fund is exempt from PRSI.
(up to €3,000 annually, from any donor) are tax-free.
Employee expenses may be exempt from income tax. Know the rules!
Employers can pay tax-free lump sums to employees on retirement/termination of employment.
Get tax relief @ 20% on health expenses for you and your dependents. This includes visits to GPs and prescription medicines.
Capital Gains Tax is usually paid by 15th December, in the year in which the sale takes place. Otherwise interest charges may apply.
Retirement lump sums, up to €200,000, are exempt from income tax under certain circumstances.