POSSIBLE WINNERS OF BREADCRUMBS

TAX

IT seems crazy that we pay the top rate of tax at a level of income where many people qualify for social welfare supports such as housing and Family Income Supplement. The level at which the top rate of tax kicks in is ridiculously low at €34,550. It could be increased to somewhere in the region of €36,500.

USC

IN line with commitments to cut USC made over the years, Fine Gael will probably make a token cut that won’t amount to much but will save it a little face.

FUEL ALLOWANCE

THIS could go up to counteract any increase in carbon tax.

SELF-EMPLOYED

THE self-employed don’t qualify for Jobseeker’s Benefit or sick pay. They pay extra tax on incomes over €100k. And they have lower tax credits than their PAYE counterparts. The Government has recognised the need to increase the tax credit for self-employed at least. It has been edged up in previous budgets to €1,150. This year it could move closer to the PAYE credit of €1,650, probably increasing to €1,350.

HOUSING

THE Government really has to act on housing. But what can it do that already hasn’t been done? Minister Donohoe could: ■

Clamp down on Airbnb hosts. They are already liable for income tax, but capital gains taxes are a grey area. If he clarified that hosts are also liable to hefty capital gains tax, it would be a huge disincentive. Currently, it’s unclear to what extent homes renting out rooms lose their exemption as a principal private residence. Increase vacant site tax. Builders could make much more money sitting on sites as they rocket in value instead of building badly needed homes. Under new regulations, vacant site tax of 3% in the first year will increase to 7% in the second and subsequent years. For example, if a vacant site is held in 2018 and 2019, under the proposed changes a 3% levy would apply for 2018, with a 7% levy applying for 2019. This levy could be further increased. ■Yet another plan for social housing. There are plenty of these that have only partially worked. Don’t be surprised to see another unveiled on Budget Day. Affordable housing is also badly in need of a boost. Reduce VAT on new homes. It seems crazy that we charge 13.5% VAT on every new home – while giving a VAT reduction to the hotels and guesthouses charging a fortune to house homeless people. There are strong arguments in favour of reducing VAT on new homes, although these are counterbalanced by fears that the cut will be passed onto buyers.