Heads up homeowners - Households set for cash boost as energy credit calls considered for Budget

Households are set for a potential €150 cash boost as the Government considers extending the reduced nine per cent VAT rate on energy bills in the 2025 budget, Finance Minister Jack Chambers has indicated.

With less than two months to go until the Coalition’s final Budget, new Finance Minister Jack Chambers last week said his budget will give workers and families a break, which could spell savings during the chillier months.

In recent budgets, the government slashed VAT on home heating gas and electric from 13.5 per cent to 9 per cent, and in last year's Budget 2024 rolled out the reduced VAT for an extra year, with the current end date slated for 31 October 2024.

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Thanks to the 12-month extension, it's estimated by the Department of Finance that consumers will shave off approximately €90 off their electricity bills, while gas users can expect to bag around €62 in savings.

Recent budgets have also included other measures to help households cope with skyrocketing energy bills with energy credits and cuts to taxes on electricity and gas.

Asked if the Government will extend the lower nine per cent VAT rate on electricity and gas to reduce energy bills, Minister Chambers told the Irish Sun that it is a measure they are considering for this winter.

He told the Irish Sun: “I fully understand that for many families the cost of living is still a central issue and despite the flash rate of inflation being at about 1.5 per cent in June and July, prices haven’t fallen for many families whether that’s in groceries, in energy or different price dynamics in our economy.

“That is why cost of living will be a central consideration in how we frame Budget 2025 and a part of that last year was the VAT reduction on energy – that will be considered in the context of Budget 2025 particularly during the winter period and how we can continue to support families during that time.”

Minister Chambers has a €1.4billion tax package that will be largely made up of significant cuts to income tax that will see lower and middle income earners keep more of their hard earned cash.