Budget 2016 has extended the government’s popular Home Renovation Incentive (HRI) Scheme for a further year. The scheme that was introduced in October 2013, was due to finish up at the end of this year, but will now run for a further 12 months
The HRI scheme provides homeowners with an income- tax credit of 13.5 per cent for qualifying expenditure on repair, renovation or improvement work carried out on their homes, once the work is done by tax compliant contractors. Tax relief can be claimed on qualifying expenditure over €4,403 (before Vat at 13.5 per cent) per property.
The tax credit however will only be given in relation to a maximum of €30,000 (before Vat at 13.5 per cent) per property. The maximum amount that can be saved is €4,050. Claimants must have the property tax payments up to date The scope of the relief is broad with a wide range of home improvement projects counting as qualifying expenditure under the scheme.
For example, painting and decorating, rewiring, tiling, fitting of kitchens, landscaping, plastering, plumbing, attic con versions, lilting alarm systems, titling built-in wardrobes and upgrading the central heating system. Loose furniture, white goods, carpets and work subject to 23% VAT are not covered by the scheme,
The Revenue has an online system for the HRI scheme. It allows tax-compliant contractors to enter details of qualifying works and payments, while homeowners can use the online system to look up qualifying works and payment details and claim their tax credit. Landlords can claim the relief the year following which the works are done. PAYE claimants can receive the credit over two years following the year the work was completed.
According to figures from the Department of financemore than €566 million worth of work has been carried out under the scheme so far. The scheme has had as it’s main aim to stimulate activity in the construction industry at the domestic end, an area of the economy that has traditionally operated to a large extent outside the tax net, while at the same time improving tax compliance among small contractors
Details of the scheme can be found at the Revenue web page here. Leaflets can also be downloaded from the Revenue website.
This commentary does not constitute professional advice and readers are strongly advised to seek the advice of suitably competent professionals in assessing the suitability and application of Home Renovation Incentive Scheme to their particular project. EDEN architects accepts no responsibility for any errors or omissions the commentary might contain.