What's new in budget 2022 banner with Irish Flag and euro

Government’s budget for 2022 was unveiled on 12th October 2021. This €4.7 billion Euro package includes a variety of measures to support the most impacted sectors across the country. Most, if not all of the country will feel the impact of the 2022 budget, including the construction, manufacturing and retrofit industries.

Extensions are expected  in schemes like EWSS (Employment Wage Subsidy Scheme), which will be available until April 2022. While the hospitality and tourism sector will experience VAT rate cuts to ease the negative impact associated with Covid over the past two years.

In order to provide economic support for those workers that are still at the home-office, there will be a 30% deduction in the income tax of the cost of electricity (heat, electricity & broadband) while working from home. The income tax reduction will save the average person working from home approximately €100 per year. 

For the housing industry, total funding of €6 billion will be allocated to the sector, while social housing will receive €2.5 billion, including €174 million towards 4,000 affordable homes. In total, 11,820 social homes will be delivered, including 9,000 new build homes. The “Help-to-Buy” scheme will be extended another year (2022) and additional assistance will be added in the following to increase the following tenancies: 14,000 HAP (Housing Assistance Payment tenancies) & 800 RAS (Rental Accommodation Scheme tenancies).

With the aim of increasing residential development, the Zoned Land Tax will see a reduction of 4%, down from 7% to 3%, based on market price of land.

Climate change was high on the agenda of Budget 2022, as the Department of the Environment, Climate & Communications will receive a €700 million capital investment. “Minister McGrath said, “€202 million of this funding will be spent in 2022 on supporting people to improve the energy efficiency of their homes” (RTE). This funding will allow for more than 22,000 home energy efficiency upgrades throughout the course of the year. 

Home energy upgrades are expected to receive €202 million in support over the course of the year. For measures around climate action, the tax on carbon will increase €7.50 for a total of €41 per tonne. The cost of petrol and diesel will also increase as of the 13th October, averaging an increase of €1.28 on a 60-litre tank of petrol, and €1.48 for diesel respectively. 

Added to that, the €5,000 relief for electric vehicles (Battery Electric Vehicles) will be maintained for two years (2023) and the Benefit in Kind exemption for electric vehicles extended to 2025 (with a tapering effect on the value of the vehicle from 2023). The Accelerated Capital Allowance Scheme will be extended for an additional three years for gas and hydrogen-powered vehicles and refueling equipment.

For more information on the key measures included in Budget 2022, visit the Government of Ireland website. You can also read the Construction Industry Federation’s response to the budget on the CIF website.

published:13 Oct 2021