Budget 2009 - Overview

Minister Brian Lenihan delivered his first budget statement in a challenging fiscal and economic environment. The measures introduced will impact on the living standards of all tax payers, and include a 1% levy on all income up to €100,100 rising to 2% on income over that amount.

Overall the business tax measures had no real surprises and included confirmation that the 12½% corporation tax rate would not be increased, increases in the rate of research and development tax credits and a three year tax exemption for start up companies.

Capital gains tax is increased from 20% to 22% with immediate effect, DIRT from 20% to 23% and VAT from 21% to 21½%. Stamp duty on commercial property is reduced from 9% to 6%.

The Minister also introduced the following changes to expenditure measures:

Reduced the eligibility for the early childcare supplement from 6 years to 5½ years.
Motor tax rates are to increase by 4% or 5%, depending on engine size.
Local authorities will be introducing a new charge of €200 on the owners of private rented accommodation, holiday homes etc., starting in 2009.
Accident and emergency rate is increased from €66 to €100.
The entitlement to a medical card for the over 70s is now to be means tested.
There will be a reduction in some subsidies for farmers including payments for disadvantaged areas, breeding and welfare scheme for suckler cows etc.
There is an increase in the pension rate by €7 per week from January, 2009 for state contributory and non contributory pensions.
There will be an increase in grants available in 2009 for the home energy scheme.