The tax-free threshold that applies to children’s inheritance from their parents is set to increase to €400,000 as part of an expected pre-election giveaway budget next week.
Funding is to be provided for the delivery of thousands of social and affordable homes with the Government expected to spend almost half the proceeds from the sale of AIB shares in a €1.25 billion boost to the resources of the Land Development Agency (LDA).
The decision comes ahead of an election where housing will be a key battleground, with the Government hoping to copperfasten support from voters in advance of polling day.
In a further sign that the Government is stalling any pain for the electorate, households are to benefit from an extension to the reduced 9 per cent VAT rate on energy bills into next year.
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Minister for Finance Jack Chambers is planning to extend the VAT cut for gas and electricity bills – which was due to expire next month – until the end of April in what is being considered a key cost-of-living measure ahead of winter.
Fine Gael has been pushing for changes to capital acquisitions tax and it is understood the tax-free threshold in the Group A category for children getting an inheritance from their parent will increase from €335,000 to €400,000.
It comes as new figures show the State is set to record an unprecedented €25 billion surplus this year as a result of the Apple tax money, a scale which dwarfs previous expectations.
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While much of the surplus will be sequestered for future investment and not available for day-to-day spending, it frames a budget which is expected to deliver a full percentage point cut in USC, as well as income tax cuts, welfare increases and a range of one-off payments for households.
The Coalition will announce its high-level intentions for the Apple tax windfall on budget day, with infrastructure projects set to benefit. The remainder of the €3 billion from AIB share sales is likely to be allocated to water- and electricity-network spending.
On Friday evening it emerged a deal has been struck to resolve a key pre-budget row between the three Coalition partners over land-hoarding tax.
The issue blew up over the summer amid a Fianna Fáil proposal to delay the introduction of Residential Zoned Land Tax (RZLT) due to fears over its impact on farmers.
This led to a Green Party backlash which in turn triggered weeks of talks to resolve the issue.
It is understood an agreement has been struck whereby the tax will go ahead as planned next February but farmers who are farming land will be exempted from it along with some small industrial holdings and businesses.
Elsewhere, it is understood Minister for Justice Helen McEntee has secured new investment targeted at tackling domestic, sexual and gender-based violence, expanding prison capacity, and speeding up the processing of international protection cases. There is expected to be funding to recruit between 800 and 1,000 gardaí.
Separately, further talks are expected over the weekend to try and bridge a gulf between what is being offered for new measures in the Department of Children and what Ministers are seeking.
There were tensions over the matter on Friday, with amounts sought for new schemes in disabilities being many multiples of what is on offer, while sources said the allocations being sought for the National Childcare Scheme also exceeded what had been made available.
