An increase in the rent tax credit is understood to be on the table as budget talks enter their final phase and the focus shifts to the final touches to the tax package.
The Coalition will reveal an €8.5 billion package of tax and spending measures on Tuesday after a budget process that has seen tensions flare even with significant extra spending and tax cuts predicted.
While the vast majority of the spending increases have been agreed, the tax package was still being worked on in Government Buildings and the Department of Finance on Monday afternoon.
It is understood the rent tax credit could be set for an increase, with a higher level of €1,200 per person or €2,400 for a married couple or civil partnership said to be under discussion.
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The current maximum value is €1,000 for a single person or €2,000 for married couples or civil partners. However, the higher threshold may not kick in until later in 2027.
The tax-free rental income allowance will be extended to backyard cabins, which the Coalition has encouraged through planning reforms.
[ Budget 2027: Improved childcare supports to include after-school careOpens in new window ]
First time buyers will be able to access up to €35,000 towards the deposit on their first home after agreement was reached by party leaders. This increases the limit by €5,000.
The entry point for the higher rate of income tax is expected to rise from €44,000 to €46,000, while adjustments to the universal social charge and tax credits are also expected to add a few hundred euro annually in benefits for middle-income earners.
It is expected that there will be an across-the-board €150 cut to student fees. There had been suggestions over the weekend that a €250 cut could be on the cards, but hopes for this had expired by Monday morning. Across the course of the day, however, the idea re-emerged, with indications on Monday evening that there would be an extra allocation of around €18 million to deliver the measure.
It is expected there will be greater access to subsidies for parents with more than one child attending college.
There will be an increase in the income disregard for the carer’s allowance, which currently stands at €1,000 for single carers or €2,000 for a couple. However, it is expected to be more modest than last year’s.
An increase is also expected on the living alone allowance, with €5 floated but not yet confirmed, and a separate increase on the child support payment.
Again, the increase to the child support payment is expected to be less than last year, when it went up by €16 weekly for kids aged 12 and up, and €8 for the under-eights.
On the pre-budget suggestion of a “culture card” for young people, originally mooted as being worth about €100, a spokeswoman for Minister for Culture Patrick O’Donovan said “money to progress” the idea had been secured “so the department will now be able to continue its work in this area”.
She added: “So far, we have been engaging with our EU counterparts on their approach. We now need to engage with the cultural sector and draw up the terms of the scheme, and develop a framework of approved venues.
“All going well, we anticipate being able to roll it out by the end of next year.”
Extra funding has been agreed for An Coimisiún Pleanála and local authority planning departments in an effort to speed up decision making.
