Budget 2025 introduced many long-awaited measures. Here are some of the changes we found particularly notable.
Gift and Inheritance Tax – Capital Acquisitions Tax (CAT)
The tax-free threshold amounts for gift tax and inheritance tax have increased for the first time in several years.
The Group A threshold (parents to children) has increased from €335,000 to €400,000 while the Group B threshold (siblings, parents, grandchildren, aunts, uncles, nieces, nephews etc.) has increased to €40,000.
The Group C threshold (anyone unrelated to you) has also increased to €20,000. These thresholds apply at the date of death or gift as and from 2 October 2024.
CAT is payable on the total of all taxable gifts and inheritances you have received since 5 December 1991. Unfortunately, there was no indication in the Budget that this aggregation period is to be shortened so these thresholds are best thought of as lifetime limits.
Stamp Duty
Stamp duty is the tax paid on the transfer of certain assets such as properties in Ireland, shares or stock of Irish companies, certain written agreements and written leases. The stamp duty rate on residential property has been increased with the rates from 2 October now standing at:
- 1% for the first €1 million
- 2% for the portion of the property value between €1 million and €1.5 million; and
- 6% on the excess value over €1.5 million*.
*The new 6% rate does not apply to bulk purchases or to purchases of 3 or more apartments in one apartment block where the consideration exceeds €1.5million.
An increased rate of 15% stamp duty applies to bulk purchases where 10 or more residential units are purchased in a 12 month period.
Vacant Homes Tax
Vacant Homes Tax (VHT) is a self-assessed annual tax that was introduced in 2023 and applies on 1 November each year. The VHT applies to properties that are capable of being lived in, but which have been left vacant for 30+ days in the previous 12 months. The tax is based on the previous 12 months; so for 2024 the VHT chargeable period is 1 November 2023 to 31 October 2024.
Budget 2025 has increased the VHT from five times to seven times a property’s existing base Local Property Tax liability. This increase will take effect from 1 November 2024.
