Home Renovation Incentive (HRI) Scheme
September 6, 2016
The Home Renovation Incentive (HRI) Scheme
The Home Renovation Incentive (HRI) Scheme was a announced as part of the last governments Budget in 2014. The HRI scheme allows both homeowners and landlords to claim tax relief on home improvements, renovations and repairs on their home or rental property. All works must be carried out by tax compliant , registered contractors. The scheme has been widely deemed as a successful one so much so that the original deadline of 31st Dec 2015 was extended until the end of Dec 2016. Over 40,o00 households in the country have already availed of the scheme with a little under six months to go to avail of the tax credit, there is still time for many households to avail of the tax credit.
If you have recently moved home and are planning on improving your home, if your budget allows, it will be more cost efficient to do so this year rather than next year. Similarly if you are considering buying soon or upgrading a rental property it would be wise to look at the Home Renovation Scheme and see how it can benefit you.
The Costs and Credit Available to Claim Back
To qualify for the scheme the minimum amount required to be spent is €5000 which would result in a tax credit of €595. The maximum tax credit available is €4050 which would amount to an spending of €30,000. It is possible to spend more but this is the maximum amount you can claim back. By using a tax compliant contractor for all works on the home, the vat can then be reclaimed via tax credit over a two year period. 50% the year after the improvements or renovations are completed on the home and 50% the following year.
Do You Qualify?
To qualify you must be a fully tax compliant home owner and your residential property tax must be fully up to date. The renovations must take place in your primary residence or in your tax complaint rental property. Works on a home you are planning to move into as your primary residence also qualify.
Does Your Tradesman or Builder Qualify?
To avail of the tax credit, all work must be carried out by a fully tax compliant, VAT registered contractor. Details of the work must be completed by the contractor not the homeowner, online.
What Work Does and Does not Qualify?
Works that qualify for 13.5% VAT rates. Examples being but not exclusive to, attic conversions, installation of new windows, works to the outside of homes including gardens and driveways, plastering, tiling , painting and energy saving improvements.
Works that qualify for a VAT rate of 23% do not qualify.
Further information including how to register for the HRI scheme for both the homeowner and the contractor is available on revenue’s website here. There are detailed video instructions and guides for homeowners and if you have further questions upon reading them , we would recommend phoning your local Revenue office during office hours and they will be able to help.
With the HRI scheme due to end at the close of 2016 it’s certainly a scheme worth looking at if you considering making some renovations or repairs.
Photo credit Pixabay
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