Looking for savings on your home renovations?

The Home Renovation Incentive (HRI) Scheme, give you the VAT back on your costs.

drawings1. What is the Home Renovation Incentive (HRI) Scheme?
2. Who can claim a tax credit under the Incentive?
3. If I don’t pay tax but pay USC, can I claim the tax credit?
4. If I’m on a Pension can I claim the tax credit?
5. If my only income is a DSP Pension, can I claim the tax credit?
6. If I don’t pay tax, can someone else pay for the works and claim the tax credit?
7. What type of works qualify?
8. What type of residential property qualifies?
9. When do the works have to be carried out?
10. How much qualifies for the HRI tax credit?
11. How much qualifies if I receive a grant or an insurance payment for the works?

1. 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 2015 for Homeowners claiming on their main home and on or after 15 October 2014 and up to 31 December 2015 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.

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2. Who can claim a tax credit under the Incentive?

Owner occupiers of a main home or Landlords of rental properties (see 1.5.), who pay Income Tax under PAYE or self assessment and whose Local Property Tax and Household Charge obligations are up to date, are eligible. The Homeowner or Landlord must be on Revenue’s Local Property Tax Register as an Owner or joint Owner of the main home or rental property. Landlords must also have registered the tenancy with the Private Residential Tenancies Board.

3. If I don’t pay tax but pay USC, can I claim the tax credit?

No. The tax credit is only available against Income Tax paid.

4. If I’m on a Pension can I claim the tax credit?

If you are on an occupational pension and you pay tax under PAYE, you can claim.

5. If my only income is a DSP Pension, can I claim the tax credit?

No. The tax credit is only available if you pay Income Tax under PAYE or Self Assessment.

6. If I don’t pay tax, can someone else pay for the works and claim the tax credit?

No. The tax credit is only available to the Homeowner or Landlord. Where there are joint owners and only some of the owners pay tax, the tax credit can be claimed by those paying tax based on qualifying expenditure incurred by them.

7. What type of works qualify?

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

  • Supply and fitting of windows and doors
  • Painting and decorating
  • Rewiring
  • Tiling
  • Supply and fitting of kitchens
  • Extensions
  • Garages
  • Landscaping
  • Supply and fitting of solar panels
  • Conservatories
  • Plastering
  • Plumbing
  • Bathroom upgrades
  • Attic conversions
  • Driveways
  • Septic tank repair or replacement
  • Central heating system repair or upgrade
  • Supply and fitting of built in wardrobes
  • Conversion of a residential premises into multiple rental units
  • Supply and fit of alarm systems
  • Radon re-mediation works

The VAT rate on works carried out must be 13.5%. Please note – the above is not a complete list. If you are unsure if repair, renovation or improvement works qualify, contact your local Revenue office. You can find contact details for your local Revenue office at Contact Locator.

8. What type of residential property qualifies?

A qualifying residential property is –

  • A Homeowners main home, which the Homeowner must own and live in or
  • A second hand home, which the Homeowner has bought and will live in as the Homeowner’s main home after the works have been carried out (see question 1.5.2. below regarding an uninhabitable house).
  • A Landlord’s rental property which must be occupied by a tenant and registered with the Private Residential Tenancies Board
  • A Landlord’s rental property, which will be occupied by a tenant and registered with the Private Residential Tenancies Board within 6 months of the completion of the works.

 

9. When do the works have to be carried out?

Qualifying works must be carried out on or after 25 October 2013 and up to 31 December 2015 for Homeowners claiming on their main home and on or after 15 October 2014 and up to 31 December 2015 for Landlords claiming on their rental property. The works can be carried out as one job or on a phased basis.

Qualifying works carried out between 25 October 2013 and 31 December 2013 and paid for by Homeowners during that period will be treated as if they were paid for in 2014 for tax credit purposes.
Qualifying works carried out between 15 October 2014 and 31 December 2014 and paid for by Landlords during that period will be treated as if they were paid for in 2015 for tax credit purposes.
Where planning permission (where required) is in place by 31 December 2015, works carried out up to 31 March 2016 will qualify for relief.
If a Homeowner had works in progress on 25 October 2013, only the portion of the works carried out and paid for on or after 25 October 2013 qualify.
If a Landlord had works in progress on 15 October 2014, only the portion of the works carried out and paid for on or after 15 October 2014 qualify.

 

10. 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 carried out and paid for from 25 October 2013 to 31 December 2015 for Homeowners and any number of jobs carried out and paid for from 15 October 2014 to 31 December 2015 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) per 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 between now and 31 December 2015. All the spending, added up, could reach the €4,405 (before VAT) per property. 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.

11. How much qualifies if I receive a grant or an insurance payment for the works?

Qualifying expenditure (over €4,405 plus VAT per property) will be reduced by three times the amount of any grant for the works.

For more information on the Home Renovation Incentive (HRI) Scheme, please visit the revenue website here

 

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