Ireland personal finance glossary

Additional Voluntary Contribution (AVC)

An extra pension payment on top of employer scheme contributions, qualifying for income-tax relief at the saver's marginal rate.

Annual Equivalent Rate (AER)

A standardised gross annual interest rate that accounts for compounding, used to compare savings accounts on a like-for-like basis.

Annual Percentage Rate (APR)

The total yearly cost of borrowing — interest plus mandatory fees — expressed as a single percentage to make loans comparable.

Approved Retirement Fund (ARF)

A post-retirement investment vehicle that holds your pension pot, lets you draw an income, and passes the residual to your estate.

Benefit-in-Kind (BIK)

A taxable perk provided by an employer — most commonly a company car, fuel card, or accommodation — valued and taxed as if it were salary.

Capital Acquisitions Tax (CAT)

Ireland's gift and inheritance tax — a 33% charge on assets received above lifetime tax-free thresholds set by the relationship between giver and recipient.

Capital Gains Tax (CGT)

A 33% tax on the profit from selling or transferring an asset that has risen in value — investments, second properties, businesses and crypto.

Deposit Interest Retention Tax (DIRT)

A flat 33% withholding tax on interest earned in Irish deposit accounts, deducted at source by the bank or credit union.

Exit Tax

A 41% tax charged on gains from Irish life-assurance bonds and most regulated investment funds, applied on disposal or every eight years on a deemed-disposal basis.

Gross vs Net Pay

Gross pay is your salary before tax; net (take-home) pay is what lands in your bank account after PAYE, USC, PRSI and pension are deducted.

Help-to-Buy (HTB)

An Irish tax-relief scheme refunding up to €30,000 of income tax and DIRT paid in the prior four years toward a new-build home deposit for first-time buyers.

Loan-to-Income (LTI)

The ratio of a mortgage loan to the borrower's gross annual income — the Central Bank caps this at 4× for most Irish buyers.

Loan-to-Value (LTV)

The ratio of a mortgage loan to the property's value, expressed as a percentage — the headline metric for how much equity a buyer has and what rate they can get.

Local Property Tax (LPT)

An annual self-assessed tax on residential property in Ireland, charged on the property's market value with local authority adjustments.

Mortgage Stress Test

The Central Bank requirement that lenders assess affordability at an interest rate at least 2 percentage points above the offer rate before approving a mortgage.

Pay Related Social Insurance (PRSI)

Ireland's social-insurance contribution funding state pension, jobseeker, illness and parental benefits, paid by employees, employers and the self-employed.

Personal Contract Plan (PCP)

A car finance product split into a deposit, monthly payments, and a large optional final 'balloon' payment that you can pay, refinance, or hand the car back to settle.

Standard Rate Cut-off Point

The income threshold up to which Irish income tax is charged at the 20% standard rate. Income above the cut-off is taxed at the 40% higher rate.

Tax Credit

A flat amount that reduces the income tax you owe, applied after the tax is calculated — €1 of credit cancels €1 of tax.

Universal Social Charge (USC)

A progressive tax on most income above €13,000 a year in Ireland, charged on top of income tax and PRSI.