The Home Renovation Incentive Scheme
The Home Renovation Incentive Scheme (HRI) provides for tax relief for Homeowners by way of an Income Tax credit at 13.5% of qualifying expenditure on repair, renovation or improvement works carried out on the Homeowner’s main home 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%). 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. 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%).
If a Homeowner is having qualifying work done, but isn’t spending over €4,405 (before VAT), it’s still worth choosing a HRI qualifying Contractor and having the work details entered on HRI online. The Homeowner may have more qualifying work carried out between now and 31 December 2015. All the Homeowner’s spending, added up, could reach the €4,405 (before VAT). It will be very difficult for a Homeowner 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 is using a HRI qualifying Contractor, the Homeowner 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%) and the highest tax credit is €4,050 (€30,000 at 13.5%).
For example -
If a homeowner paid €3,800 (before VAT) to a HRI qualifying electrician for rewiring his or her home and €800 (before VAT) to a HRI qualifying painter for painting work on his or her home, the tax credit is €4,600 13.5% €621.
2015 will be the first year for HRI tax credits. In general, the HRI tax credit will be included in tax credits over two years, starting the year after the work is carried out and paid for.