Budget 2025: Main points and what was announced

Michael Bolton

Budget 2025 is complete, in what was the final budget of this Government before the upcoming general election.

Amongst the announcements are:

Here is how it was announced by Minister for Finance Jack Chambers and Minister for Public Expenditure Paschal Donohoe.

15:10pm

Wayne Stanley, Executive Director of the Simon Communities of Ireland said:

“It is extraordinary that so much money could be expended and yet, so little done for those at the sharpest end of the housing crisis.

"We welcome the vacant homes tax, though we are concerned that it is insufficient to drive change. Similarly, the increase in social welfare rate will be welcomed by those receiving them, but we know that it is not a sufficient buffer to work as a protection to low-income households to prevent homelessness.

"However, the big picture is that the State needs to be working towards delivering 15,000 social homes a year. The Government has acknowledged that the current targets are insufficient. In our pre-budget submission, we had proposed an increase to fund the development of 12,500 social homes to move us closer to the target of 15,000.

"The Budget has delivered a stay the course allocation for the 10,000 social homes in line with Housing for All.

"This is simply insufficient and we see another budget where the rhetoric of homelessness being a ‘top priority’ is not in evidence.”

15:03pm

Sinn Féin finance spokesperson Pearse Doherty said the public would deliver their verdict on the Budget at the general election.

He said: “People see through the spin. People hear about the millions and the billions, but they don’t feel better off. For most people, it’s about what they have at the end of the week, when the bills are paid, is there anything left is the question they ask, and the answer for far too many is no.

“Workers and families can’t afford another five years of Fianna Fáil and Fine Gael. And it is in that context that this Budget will be judged, how your parties will be judged also at election time.”

Mr Doherty said the Government had been “exposed over and over again as serial wasters”.

He said: “Despite the Budget you’re announcing today, we still feel poor as a country in so many ways, in housing and health and disabilities and mental health, and your job isn’t just to spend money.

“Your job is to get results, and that’s where you’re completely and utterly failing.

”This is the last Budget from this Government, and like all others, there will be a spending increase.

“But the question we must ask ourselves, like all other budgets, is will it make the big difference that people need in their lives, the difference that they are crying out for?

“Will it address the housing crisis and make housing affordable, as laid out by Sinn Fein? The answer is No.

“Will it fix the health service that is on its knees? No, it won’t. Will it address the cost-of-living crisis in a meaningful way? No, it won’t.

“And will it deliver the fundamental change that we need in their childcare system by introducing childcare a 10 euro day for families across the state? Again, the answer is no. The answer is no, because this Government is incapable of delivering real change, incapable of getting value for money.”

14:39pm

Paschal Donohoe has finished delivering his part of the Budget, and Sinn Féin's finance spokesperson for finance Pearse Doherty is now criticising the measures.

14:37pm

€328 million in funding for the media sector.

That includes €6 million for the independent broadcasting sector.

Meanwhile, €107 million has been committed to support Gaeltacht communities.

The Budget dedicates €226 million to the tourism sector.

He said €231 million would be directed to the sports sector.

14:32pm

A Budget package worth €3.9 billion was unveiled for the justice sector.

As part of this spending, there will be an extra 1,000 gardaí and 150 Garda civilian staff.

Paschal Donohoe said the extra funding will allow for 350 additional staff for the Irish Prison Service, as well as investment in prisoner care and rehabilitation.

An additional 400 staff will be hired in the international protection processing system.

An additional €7 million will be spent on support for victims of domestic and gender-based sexual violence.

14:27pm

350 extra staff for the Prisons Services.

1,000 gardaí and 50 civilian gardaí.

There will be 400 additional staff for the International protection processing system and seven million for organisations tackling gender and domestic violence.

There will be 22 per cent increase in the capital money for defence to invest in military radar and subsea surveillance projects.

400 extra defence force members in 2025.

14:25pm

€3.9 billion for the Department of Transport, comprising €1 billion in current funding and €2.9 billion in capital funding.

There will be further investment in cycling and walking infrastructure and the continuation of temporary fair initiatives including the Young Adult Card for 19 to 25-year-old's and the 90-minute fare.

Reductions in the cost of public transport will continue.

It will be 20 per cent for adult fares, and 50 per cent for young people.

Public transport will be free for those under the age of nine - and those over 70 will be able to travel with another person for free.

14:22pm

The minister said more than €3 billion was also being set aside between 2026 and 2030 to invest in climate transition.

The minister said that would be used to support designated environmental projects that could assist with reducing emissions, improving air quality, or improving biodiversity.

14:18pm

Paschal Donohoe has announced €3.2 billion in capital funding for the housing sector.

There will be 10,000 newly built social homes at a cost of €2 billion in 2025.

Mr Donohoe said an “unprecedented” €1.6 billion will continue to support 66,000 social housing tenancies alongside an additional 7,400 social homes next year, as well as 38,000 social housing leases already in place.

14:12pm

There are 495 new beds for the health service in Budget 2025.

Budget 2025 will see additional funding of €2.7 billion for the health sector over two years, bringing the total health allocation to €25.76 billion.

There will be an increase in the numbers working in the health service, not including disability services, and will reach over 130,000 whole-time equivalents, an increase of 27 per cent since 2019.

The Government has added 600,000 home support hours.

That's in addition to increased access to free IVF and Hormone Replacement Therapy (HRT) free of charge.

14:10pm

Third-level student contributions will continue to be reduced by €1,000.

Funding will also continue for the continued school-transport fee reduction and State exam fee waiver.

Meanwhile, the student assistance fund will receive additional funding and the post-graduate tuition fee contribution will be increased by €1,000 for the student grant recipients.

14:07pm

The inheritance tax threshold for children inheriting from a parent is increasing from €335,000 to €400,000. At the same time, the thresholds for other inheritance taxes on other beneficiaries are changes.

Those who qualify under Group B (siblings or grandchildren etc) goes from €32,500 to €40,000 and Group C (others such as uncles, aunts, grandnephews, cousins and friends) goes from €16,250 to €20,000.

14:04pm

National Childcare Scheme budget to increase 44 per cent leading to full-time childcare costs, reducing by an average of 1,100 a year.

The number of children availing of the scheme will increase to 216,000.

14:01pm

Two double payments of child benefit will happen in November and December.

€400 lump sum on the working family payment will be made this year.

Maternity, paternity, adoptive and parents leave is to rise by €15.

Those on fuel allowance will receive €300 in November.

Meanwhile, there will be €200 extra on the living alone allowance.

Also, €400 will go to those on carers support grant, disability allowance, blind pension, invalidity pension and domiciliary care allowance.

13:59pm

Energy credit of €150 for all households, with two equal payments for all households.

The school transport fee reduction and state exam fee waiver will continue.

13:56pm

Jack Chambers finished his speech, with Minister for Public Expenditure Paschal Donohoe taking over.

13:46pm

Carbon tax will increase on 9th October from €56 to €63.50 for petrol and diesel.

The motor insurers insolvency levy will be reduced from one per cent to zero per cent from January 1st.

VAT for heat pumps will be reduced from 23 per cent to nine per cent, complementing the Government’s National Retrofit Plan.

Battery electric commercial vehicles can now qualify for the €200 VRT rate.

Meanwhile, an emissions-based VRT approach for category B commercial vehicles will introduce a lower eight per cent rate for vehicles with CO2 emissions of less than 120 grams per kilometres.

The threshold for classification of a low-emitting company car will also be reduced from January 1st 2027.

13:42pm

A pack of 20 cigarettes is going up by €1.

It brings the most popular pack price to €18.05 from midnight.

A tax on e-cigarettes will be introduced at a rate of 50c per ml of e-liquid. A disposable vape with 2 ml of e-liquid will now cost an extra €1, bringing the price to over €9.20 incl. VAT

13:41pm

Stamp duty on bulk purchases of homes by investment funds rises from 10 to 15 per cent.

The rate of stamp duty applicable to residential property valued above €1.5 million to six per cent with effect from tonight.

The existing rate of one per cent will continue to apply to values up to €1 million, and two per cent on values above €1 million, with a third rate of six per cent to apply to any value in excess of €1.5 million, with immediate effect.

The renters tax credit rises to €1,000, and the landlords letting expenses scheme will also be extended.

13:37pm

The reduced nine per cent VAT rate for gas and electricity will be extended for another six months.

The flat rate scheme for farmers is raised from 4.8 to 5.1 per cent.

There will be an extension to 2027 of the general stock relief, stock relief for young trained farmers, stock relief for registered farm partnerships,

13:33pm

The standard rate income tax cut off point has increased by €2,000 to €44,000.

Changes to tax credits include: €150 increase in home carer tax credit; extra €150 single person child carer tax credit; extra €300 incapacitated child tax credit; extra €300 blind person's tax credit; and extra €60 Dependent Relative Tax Credit.

13:28pm

The Help to Buy scheme is to be extended to the end of 2029.

Rent tax credit is increasing by €250, bringing it to €1,000 and €2,000 for a jointly assessed couple for 2025.

Pre-letting expenses relief for landlords being extended to the end of 2027.

The relief for pre-letting expenses for landlords has been extended.

Mr Chambers said the relief will continue for three more years, until the end of 2027.

Mortgage interest relief will be extended for another year.

13:25pm

The Universal Social Charge (USC) will decrease to three per cent.

As of January 1st 2025, the national minimum wage will increase by 80 cent per hour to €13.50 per hour.

The entry threshold to the new three per cent rate is being increased by €1,622 to €27,382, in line with the increase to the national minimum wage.

This means that a full-time worker on the minimum wage will see an increase in their net take home pay of approximately €1,424 on an annual basis.

A single person earning €20,000 or less in 2025 will now be outside of the income tax net.

There will be further increases to Capital Acquisition Tax thresholds.

The minister said that the Group A threshold is increasing from €335,000 to €400,000; the Group B threshold is increasing from €32,500 to €40,000 while the Group C threshold is increasing from €16,250 to €20,000.

Payments to women under the Cervical Check payment scheme will be exempt from tax.

13:20pm

Inflation is projected to remain under two per cent, with employment to increase by 110,000 between now and the end of 2025, while unemployment will remain below 4.5 per cent over the same period.

13:15pm

The Government is to spend the €3 billion from the sale of its shares in AIB on national infrastructure.

A further €1.25bn will be made available to the Land Development Agency, bringing the total amount of funding to the LDA to €6.25bn.

13:10pm

The Irish Hotels Federation (IHF) expressed deep disappointment with Budget 2025, saying the Government has failed to respond in any meaningful way to the commercial crisis facing hospitality food-led businesses.

IHF President Michael Magner says: “The Budget does next to nothing to address the enormous challenges confronting our sector while at the same time imposing further costs on thousands of hospitality businesses.”

“The decision not to reduce the hospitality VAT rate is short-sighted and extremely concerning given the stark commercial environment that food service businesses are operating under throughout the country. These businesses are facing a perfect storm as they grapple with rising costs, the impact of the 13.5% VAT rate and very tight margins.

It is becoming increasingly clear that Government policies are now fundamentally at odds with the long-term interests of our sector and wider tourism industry.

“The half-baked measures announced today will have almost no impact for businesses that are struggling with ever-increasing costs, much of which are a direct result of the Government’s own economic policies.

"The bottom line is that inaction now poses an enormous risk to our wider hospitality and tourism industry which, as one of Ireland’s largest indigenous employers, supports over 280,000 livelihoods some 70% of which are outside of Dublin.”

13:05pm

In his speech, Jack Chambers started by praising the Government by overcoming challenges such as the war in Ukraine and Brexit.

He says this budget will "plan for the future."

Mr Chambers also says the Budget will help "give real opportunity for the future."

Making reference to the recent Apple tax ruling, Mr Chambers said the windfall has the opportunity to be "transformational".

He says there will be €1 billion for infrastructure payments, including €1 billion for Irish water.

13:00pm

TDs are taking their seats as Minister for Finance is about to get his pre-Budget speech underway, in what is his first budget as minister.

This will be followed by a speech Minister for Public Expenditure Paschal Donohoe.

12:35pm

A timely report published ahead of the Budget speech shows Ireland has leapfrogged the Bahamas to become the world's ninth most significant tax haven, according to a ranking by pressure group the Tax Justice Network, which campaigns for tax transparency.

The study measures the amount of corporate financial activity in countries, including money flows, as well as transparency and tax schemes on offer, assigning a points-based ranking.

12:20pm

Enterprise Minister Peter Burke said today’s announcements would show a “very pro-business Budget”.

Addressing criticism over a lack of cut to the VAT rate for hospitality, he said businesses will receive a significant cash payment through a “power-up scheme”.

Mr Burke said: “Cash is the lifeblood of our small family businesses and that’s what we will be doing, giving them cash before the New Year and that will be a significant help to them.

“Obviously other measures like improving discretionary income for citizens right across the economy.”

12:10pm

Mairead O’Driscoll - a tax adviser known as the Tax Nerd on social media – has identified the sort of savings workers can expect to make from expected changes to Universal Social Charge.

Someone with a salary of about €40,000 would see about €150 saving in Universal Social Charge (USC) in a year. If you earn over €70,000 you could see a saving of about €400 in a year. The maximum anyone on the highest scale is going to save is €1,000 – and on average for the lower earner the maximum would be about €350,” she told Newstalk this morning.

12:05pm

A “baby boost” payment of €420 – suggested by Green Party leader and Children’s Minister Roderic O’Gorman to help parents with the costs of a newborn baby – has also been approved, along with a 15 euro increase in maternity and paternity benefit.

Mr O’Gorman told reporters on Tuesday that the Budget meets “requirements in terms of supporting parents, children and families and supporting the planet”.

A disagreement on the scale of welfare payment increases surfaced in the media over the weekend, where it was reported Fine Gael was seeking a €15 increase to pensions alongside a lower hike for the jobseekers’ allowance.

Simon Harris had said publicly that it did not make sense to spend significantly more on jobseekers’ allowance at a time when the economy is at near full employment, while Micheál Martin said the €12 hike had been “stitched in” for months.

Public Expenditure Minister Paschal Donohoe said it was understandable that different views had been aired: “The critical thing is this Budget has been delivered collegiately, constructively and bears all the hallmarks of an administration that has been stable.”

12pm:

The Budget will not be a “significant fueller of inflation”, the Tanaiste has said.

Asked if the Budget risked overheating the economy, Micheal Martin told reporters that the latest flash estimates put inflation at approximately 0.2%.

Speaking at Government Buildings, he said: “I don’t think it’s the Budget in itself would be a significant fueller of inflation.

“We have to keep all of those issues under review, obviously, over the next 12 months – but the economy right now is in a healthy space.”

Mr Martin added that limits on expenditure had been set by the Summer Economic Statement.

11.35am:

The Government has maintained “stability and safety” in the public finances, the Public Expenditure Minister has said.

Speaking before he presents Budget 2025, Paschal Donohoe said there will be a large surplus next year that will guard against any potential risks in the country’s corporation tax receipts.

Asked about reports of divisions within the coalition over the social welfare package, Mr Donohoe said:

“We reached agreement on all the measures contained in the Budget. It is understandable in a budget process, particularly this one, that there will be different views offered on important matters.

“The critical thing is this Budget has been delivered collegiately, constructively and bears all the hallmarks of an administration that has been stable with three different political parties in it and many competing demands.”