HOME RENOVATION SCHEME


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

  • Tiling

  • Supply and fitting of kitchens

  • Extensions

  • Garages

  • Landscaping

  • Supply and fitting of solar panels

  • Conservatories

  • Plastering

  • Plumbing

  • Bathroom upgrades

  • Supply and fitting of windows and doors

  • 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 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.

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 example -

€8,810 plus VAT (at 13.5%) of €1,190 = €10,000 was paid for external wall insulation

€2,700 was received under a Better Energy Home Scheme grant

The €10,000 will be reduced by €8,100 (€2,700 x 3)

Leaving €1,900 (€10,000 less €8,100) qualifying expenditure

This €1,900 includes VAT of €226

The tax credit can be claimed on the €1,900 less €226 = €1,674 (before VAT).

The tax credit is €1,674 x 13.5% = €225.99.

If the works are the subject of an insurance claim, qualifying expenditure (over €4,405 plus VAT per property) will be reduced by the insurance amount due or received.

For example -

€7,048 plus VAT (at 13.5%) of €952 = €8,000 was paid for repair works and

An insurance payment of €6,000 was received in respect of the repair works

The qualifying expenditure of €8,000 will be reduced by €6,000

Leaving €2,000 (€8,000 less €6,000) qualifying expenditure

This €2,000 includes VAT of €238

The tax credit can be claimed on the €2,000 less €238 = €1,762 (before VAT).

The tax credit is €1,762 x 13.5% = €237.87.

If the main home or rental property is jointly owned, can each owner claim the maximum tax credit?

No. The maximum tax credit applies to the property but Homeowners or Landlords can opt to split the tax credit between the owners based on qualifying expenditure incurred by each owner.

What happens if I'm waiting for an insurance claim?

For the purposes of calculating the relief, the qualifying expenditure will be reduced by the amount due to be received.

The works can be carried out by one or more Contractors. Each Contractor must qualify for the HRI. Yes. As the qualifying expenditure in total exceeds €4,405 (before VAT at 13.5%) for the property, it qualifies. Each Contractor must qualify for the HRI

When is the tax credit payable?

In general, the credit is payable over the two years following the year in which the work is carried out and paid for. Qualifying work which is carried out between 25 October 2013 and 31 December 2013 and which is paid for during that period by Homeowners will be treated as if it was paid for in 2014 for tax credit purposes (so the tax credit is payable in 2015 and 2016).

Qualifying work which is carried out between 15 October 2014 and 31 December 2014 and which is paid for during that period by Landlords will be treated as if it was paid for in 2015 for tax credit purposes (so the tax credit is payable in 2016 and 2017).

When can the HRI tax credit be claimed?

The tax credit can be claimed in the year after the qualifying work is carried out and paid for. Qualifying work that was carried out and paid for between 25 October 2013 and 31 December 2013 will be treated as if it was paid for in 2014 for tax credit purposes for Homeowners.

Qualifying work that was carried out and paid for between 15 October 2014 and 31 December 2014 will be treated as if it was paid for in 2015 for tax credit purposes for Landlords.

Claims for 2014 can be made by Homeowners through myAccount or ROS from January 2015.

Claims for 2015 can be made by Landlords through myAccount or ROS from January 2016.

The tax credit for 2014 claims by Homeowners will be given in 2015 and 2016.

The tax credit for 2015 claims by Landlords will be given in 2016 and 2017.

Is there a minimum and maximum tax credit?

This depends on the amount spent on qualifying works as well as any grants or insurance claims due or received during the qualifying HRI period. If there’s no grant or insurance claim, the lowest tax credit amount is €595 per property and the highest tax credit amount is €4,050 per property.

For example:

  1. 1. A Homeowner or Landlord paid a HRI qualifying plasterer €3,000 (before VAT) for plastering work in their home or rental property and also paid a HRI qualifying painter €2,050 (before VAT) for internal and external painting work on their home or rental property

  2. A Homeowner or Landlord paid a HRI qualifying electrician €5,000 (before VAT) for rewiring their home or rental property The tax credit is €5,000 x 13.5% = €675

  3. 3. A Homeowner or Landlord paid a HRI qualifying builder €40,000 (before VAT) for an extension on their home or rental property The tax credit is €30,000 x 13.5% = €4,050.


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