New Year rings in new, positive tax changes – Donohoe

A New Year means more money back in peoples’ pockets, with changes under Budget 2025 set to come into effect from 1^st January, Fine Gael Minister Paschal Donohoe has said.

The measures were announced in October and include changes to tax bands, reduced USC, and enhanced tax credits.

Minister Donohoe said: “I am pleased that 2025 will be yet another year in which people will be supported with positive tax changes, putting more money back into their pockets.

“This is the 10^th year in a row we have been in a position to make tax changes of this nature, thanks to prudent management of the country’s finances by Fine Gael in government.

“We are increasing the rate at which people pay the higher rate of tax, with the standard rate cut-off point rising by €2,000 to €44,000.

“The 2% USC band will increase to €27,382, while the 4% rate will be reduced to 3%.

“These important changes will result in people being able to keep more of their own hard-earned money. A single person on an income over €50,000 per year will pay €859 less in tax compared to the previous year.

“The personal tax credit, the PAYE tax credit, and the earned income tax credit will all see increases by €125, to a total of €2,000.

“As part of a range of measures to support carers, the home carers tax credit will increase by €150 to €1,950. Similarly, the dependent relative tax credit will increase by €60 to €305.

“I am also very pleased that this year we are increasing the inheritance tax threshold for parents to children from €335,000 and €400,000.

“Fine Gael will always be the party that rewards hard work, and from this year employers can award their employees with a €1,500 voucher up to five times a year.

“Despite inflation falling, we recognise that many people are still faced with cost-of-living challenges, and it is vital that we continue to put money back in people’s pockets through these and other budgetary measures,” Minister Donohoe concluded.