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Ireland budget: Local property tax introduced Ireland budget: Local property tax introduced
(35 minutes later)
The Irish government has announced a fresh package of spending cuts and tax rises worth billions of euros in its budget for 2013.The Irish government has announced a fresh package of spending cuts and tax rises worth billions of euros in its budget for 2013.
These include a new property tax of 0.18% of the value of a home up to 1m euros ($1.3m; £800,000).These include a new property tax of 0.18% of the value of a home up to 1m euros ($1.3m; £800,000).
These are the latest in a long line of austerity measures imposed on Ireland by international lenders that bailed out the country in 2010.These are the latest in a long line of austerity measures imposed on Ireland by international lenders that bailed out the country in 2010.
The government said it would meet its deficit reduction target for this year.The government said it would meet its deficit reduction target for this year.
It projected a budget deficit of 8.2%, compared with a target of 8.6%. The deficit would fall steadily to 2.9% by 2015, it added.It projected a budget deficit of 8.2%, compared with a target of 8.6%. The deficit would fall steadily to 2.9% by 2015, it added.
These forecasts were based on economic growth of 1.5% next year, rising to 2.9% in 2015.These forecasts were based on economic growth of 1.5% next year, rising to 2.9% in 2015.
"There are manifest signs that the country is emerging from the worst of the crisis and that the efforts of the Irish people, despite the hardship, are leading to success," said Irish Finance Minister Michael Noonan."There are manifest signs that the country is emerging from the worst of the crisis and that the efforts of the Irish people, despite the hardship, are leading to success," said Irish Finance Minister Michael Noonan.
The Local Property Tax will be introduced in July next year, and will include a higher rate of 0.25% that kicks in on the balance of any property over and above 1m euros. Tax exemptions
The government also increased tax on alcohol and cigarettes. He added that 2012 had seen the "first signs of stability in both the residential and commercial property markets in six years".
Income tax rates were left unchanged. To help "maintain momentum" in the domestic property market, any new or previously unoccupied homes bought between the beginning of next year and the end of 2016 will be exempt from the new property tax. Equally, any homes bought by first-time buyers in 2013 will be exempt.
For all other homes, the Local Property Tax will be introduced in July next year, and will include a higher rate of 0.25% that kicks in on the balance of any property over and above 1m euros.
However, local authorities will be able to vary the rates by 15% above or below the national rates "to better match their funding needs".
The government also increased tax on alcohol and cigarettes, and announced that maternity benefit would become a taxable income in July 2013.
Income tax rates, as well as duty on petrol an diesel, were left unchanged.
"The individual measures are modest," said Mr Noonan. "However, I believe that the combination of the measures will have a significant beneficial impact."