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Home Renovation Incentive (HRI) Scheme

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What is the Home Renovation Incentive (HRI) Scheme?

The Home Renovation Incentive (HRI) Scheme provides for tax relief for Homeowners and Landlords by way of an Income Tax credit at 13.5% of qualifying expenditure on repair, renovation or improvement works carried out on a main home or rental property by qualifying Contractors.

The amount of the HRI tax credit depends on the amount spent on qualifying works. Tax relief can be claimed on qualifying expenditure over €4,405 (before VAT at 13.5%) per property. This €4,405 (before VAT) can be the total from any number of jobs carried out and paid for from 25 October 2013 to 31 December 2016 for Homeowners claiming on their main home and on or after 15 October 2014 and up to 31 December 2016 for Landlords claiming on their rental property. While there is no upper limit on expenditure on qualifying works, the tax credit will only be given in relation to a maximum of €30,000 (before VAT at 13.5%) per property.

If a Homeowner or Landlord is having qualifying work done but isn’t spending over €4,405 (before VAT) on the property, it’s still worth choosing a HRI qualifying Contractor and having the work details entered on HRI online. The Homeowner or Landlord may have more qualifying work carried out on the property between now and 31 December 2016. All the spending on the property, added up, could reach the €4,405 (before VAT). It will be very difficult to go back to a Contractor, to try to get him or her to enter details to HRI online, for a job from a year or more ago.

In addition, if a Homeowner or Landlord is using a HRI qualifying Contractor, the Homeowner or Landlord can at least be sure that the Contractor is tax compliant.

If there are no grants or insurance claims, the lowest tax credit amount is €595 (€4,405 at 13.5%) per property and the highest tax credit is €4,050 (€30,000 at 13.5%) per property.

For example –

If a Homeowner or Landlord paid €3,800 (before VAT) to a HRI qualifying electrician for rewiring his or her main home or rental property and €800 (before VAT) to a HRI qualifying painter for painting work on his or her main home or rental property, the tax credit is €4,600 x 13.5% =€621.

What type of works qualify?

Examples of repair, renovation or improvement works that qualify under the Incentive include –

  • Painting and decorating
  • Rewiring
  • Supply and fitting of kitchens
  • Extensions
  • Garages
  • Supply and fitting of solar panels
  • Plumbing
  • Bathroom upgrades
  • Attic conversions
  • Driveways
  • Septic tank repair or replacement
  • Central heating system repair or upgrade
  • Conversion of a residential premises into multiple rental units
  • Supply and fit of alarm systems
  • Radon remediation works.

How much qualifies for the HRI tax credit?

Tax relief can be claimed on all qualifying expenditure, once the Homeowner or Landlord spends over €4,405 (before VAT at 13.5%) per qualifying property. This €4,405 (before VAT) can be the total from any number of jobs on the property carried out and paid for from 25 October 2013 to 31 December 2016 for Homeowners and any number of jobs on the property carried out and paid for from 15 October 2014 to 31 December 2016 for Landlords. While there is no upper limit on expenditure on qualifying works, the tax credit will only be given in relation to a maximum of €30,000 (before VAT at 13.5%) per qualifying property.

If a Landlord is having a rental property converted into multiple rental units, the maximum of €30,000 (before VAT at 13.5%) applies to each of the new rental units.

If a Homeowner or Landlord is having qualifying work done but isn’t spending over €4,405 (before VAT) on the property, it’s still worth choosing a HRI qualifying Contractor and having the work details entered on HRI online. The Homeowner or Landlord may have more qualifying work carried out on the property between now and 31 December 2016. All the spending on the property, added up, could reach the €4,405 (before VAT). It will be very difficult to go back to a Contractor, to try to get him or her to enter details to HRI online, for a job from a year or more ago.

In addition, if a Homeowner or Landlord is using a HRI qualifying Contractor, the Homeowner or Landlord can at least be sure that the Contractor is tax compliant.

http://www.revenue.ie/en/tax/it/reliefs/hri/hri-general-faqs.html#section1

 

Posted on August 17, 2016

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