Returning emigrants may not qualify for first-time buyer’s relief
Irish abroad: Was there anything for you in Budget 2017?
Minister for Public Expenditure and Reform Paschal Donohoe with Minister for Finance Michael Noonan with Budget 2017 at Government Buildings. Photograph: Cyril Byrne/The Irish Times
When The Irish Times asked readers abroad last week what they would like to see in Budget 2017, measures making it easier to get a mortgage or buy a home in Ireland was one of the most common responses.
A new Help to Buy scheme will provide a 5 per cent tax relief for first-time buyers of up to €20,000 on new homes, but returning emigrants who have spent more than four years abroad won’t be eligible, as the relief takes the form of a rebate of income tax paid over the previous four tax years.
Fianna Fáil’s spokesman on finance Michael McGrath said denying returning emigrants access to the scheme “raises fundamental issues of fairness”.
There were no initiatives at all in Budget 2017 specifically targeted at the Irish abroad, despite mounting calls on the Government provide incentives for emigrants to return to live in Ireland.
Given the criticism Mary Mitchell-O’Connor’s “emigrant tax” proposal attracted from all angles last week, it is no surprise there was no mention of such a scheme in today’s budget.
Minister for Finance Michael Noonan did admit that “high marginal tax rates… discourage people from taking jobs and discourage emigrants from returning home”, but said, “as you all know, I have limited resources to change the situation in this budget”.
But depending on personal circumstances, there may be other elements of the budget package which do make Ireland a more attractive place for Irish people living overseas to move back to, including:
- Reduction in USC by 0.5 per cent for the three lowest rates - that’s the 1 per cent, 3 per cent and 5.5 per cent rates. The USC will be phased out completely over time, resources permitting.
- Increase in the Earned Income Tax Credit to €950, which the Government says will benefit 147,000 self-employed people.
- Recruitment of 4,500 new frontline staff including 800 gardaí, nurses and 2,400 teachers (900 to be resource teachers) in 2017.
- Childcare support package worth €35 million to provide subsidies for children aged between six months and three years to attend Tusla-registered childcare providers. The subsidy will be means-tested based on parental income.
- €5 increase in the State pension from March 1st.
A full summary of all the main points can be found here.If you are living abroad, was there anything in Budget 2017 for you? If you are considering moving back to Ireland, which initiatives, if any, did you find encouraging? Or are you disappointed not to see a specific incentive included? Email your reaction to email@example.com, including a few lines about yourself. A selection may be published online. Thank you.