Tax incentive of €3,000 aims to boost use of cargo bikes by families

Families are being encouraged to buy cargo bikes with a new €3,000 tax incentive which is contained in the Finance Bill.

The €3,000 limit is twice that of e-bikes (€1,500) and also more than the €1,250 incentive to buy push bicycles available under the current Bike to Work scheme.

The increased limit reflects the price of cargo bikes which typically retail at between €2,800 and €8,000. Under the Bike to Work scheme, commuters can buy a bicycle from their before-tax income, an effective saving of 41 per cent for those on the higher rate of tax.

In other countries, cargo bikes and e-cargo bikes have been lauded as an alternative to a second family car.

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The announcement was made by Minister for Transport Eamon Ryan.

Cargo bikes cost substantially more than regular bikes or e-bikes, both of which saw increases in the limits applicable for the Bike to Work scheme in 2020.

More affordable

Mr Ryan said the increase to €3,000 would make cargo bikes more affordable for those choosing to use such means of transport as an alternative to a second car.

“Cargo bikes have become more popular in recent years with many people using them to bring their kids to school, for shopping and for work purposes as delivery vehicles,” he said.

“The cost factor, however, is an impediment to many people who may want to buy one. We hope that by increasing the limits for cargo bikes, more people will be able to choose them as a more sustainable way to get around.”

The department is looking at rolling out the “bicycle library” concept at a number of schools. This would allow prospective commuters to trial using a cargo bike to see if it worked for them.

Mr Ryan added that his department was looking at ways of incentivising delivery companies to further invest in cargo bikes.

“The coming years will see a reallocation of road space away from private vehicles towards public transport and space for people walking and cycling, and cargo bikes will play a large part in how we use our roads. I look forward to seeing many more cargo bikes on our roads over the coming years, helped by this decision today to make them more affordable,” he explained.

Cycling campaigners

The announcement came as something of a surprise for cycling campaigners who had been disappointed that no measures were announced in the budget.

Irish Cycling Advocacy Network chairwoman Neas Bheilbigh described the announcement as a positive step forward that would encourage more families to invest in cargo bikes.

She said the initial outlay was considerable but the long-term benefits made it worthwhile.

However, she said the scope of the Bike to Work scheme was too narrow and the same incentives should be made available to the self-employed, to schoolchildren and to pensioners as PAYE workers.

The network has suggested that interest-free loans be made available to poorer families to buy cargo bikes.

“We are glad something has come along. We are just disappointed it doesn’t benefit lower-income families as well,” she said.

“Many of them are living in the city and are too car-dependent. They have should have the option of being able to ditch the car.”