A selection of your Budget 2011 queries to our online team
I am in the process of buying a house; I am a first-time buyer. I have paid a deposit on a house, contracts not signed, should be done in January. Will I have to pay the 1 per cent stamp duty even though I verbally agreed to buy the house last week, is this still a binding agreement?
Niall Reilly
The new stamp duty rates will apply to any conveyances or transfers executed on or after December 8th, 2010. Transitional measures will be put in place to ensure that any purchaser who has contracted to buy residential property before December 8th, 2010 and who completes the purchase by July 1st, 2011 will not end up paying more stamp duty than they would have under the existing rules. The position is somewhat unclear in your situation as you have not yet signed the contract. You should confirm the position with your solicitor, however, it seems likely that the transitional measures will apply in your case.
Are people with medical cards and on family income supplement affected by the tax changes and child benefit. The income levy did not apply to those with medical cards?
Roy Johnson
Unfortunately, unlike the health levy and the income levy, it appears that individuals with medical cards will not be entitled to an exemption to the Universal Social Charge (USC). It is understood, however, that all Department of Social Protection payments are exempt from the USC which should include the family income supplement and child benefit payments.
What does the Minister mean in relation to Section 23 relief only being allowable against the property itself? Does that mean that if I own an apartment with €200,000 relief I cannot set any other rental income off against that relief? Can he change these prior commitments on the fly when people entered into financial arrangements based on a fact that is now a mere fiction?
Robert Browne
You are correct; the €200,000 relief can only be used against that property. The Government has that right and has used it in the Budget, which is very unfair.
I am a mature postgraduate studying in the UK currently receiving a non adjacent grant of €3,250 a year. I understand I will be cut 4 per cent but the Government plans to limit mature students’ benefits to those payable to ordinary students. If this is the case I will be down over €2,000 and be unable to continue my study. Can you clarify if this will be the case?
Paidi Cole
Based on the budgetary comments from the Department of Finance, this would appear to be the case. Given your circumstances, it would appear very unfair and you might see if the fact you are studying overseas may be a special case, as the exact guidelines will be circulated to the grant issuing authority shortly.
What change has there been to inheritance tax. I intend to transfer a site for building from parents into my name and want to know the cost and when it kicks in.
Jamie McNamara
The changes announced to the inheritance tax kick in immediately. The threshold has been reduced by 20 per cent. Before the Budget a child could inherit – or be given as a gift – €414,799 from a parent without incurring any tax penalties. This has now fallen to €331,839. Someone who was able to inherit €41,481 from a related person tax free can now only inherit €33,185 while non-related people who were able to inherit €20,740 can now inherit just €16,592 without paying any penalties.
What are the implications for private pension payments – is tax relief on payments coming down?
Jackie Fitzpatrick
Yes, the tax relief on private pension payments is to come down very significantly over the next four years. At present for every €100 a person pays into a private pension they get relief of €49. They are given relief at the highest tax rate of 41 per cent, plus relief for their PRSI and health and income levy payments. Relief on the PRSI, health and income levy payments is to be scrapped immediately and between now and 2014, the level of relief available will fall to the lowest tax rate of 20 per cent. This will mean that for every €100 a person pays into a private pension they will get relief of just €20 so they will be €29 worse off per €100 paid in.