What is the Home Renovation Incentive (HRI) Scheme?
The Home Renovation Incentive (HRI) Scheme 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%).
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. 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 during that period will be treated as if they were paid for in 2014 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 works were in progress on 25 October 2013, only the portion of the works carried out and paid for on or after 25 October 2013 qualifies.
Examples of repair, renovation or improvement works that qualify under the Incentive include –
- Painting and decorating
- Supply and fitting of kitchens
- Supply and fitting of solar panels
- Bathroom upgrades
- Supply and fitting of windows
- Attic conversions
- Septic tank repair or replacement
- Central heating system repair or upgrade
- Supply and fitting of built in wardrobes
What types of work do not qualify ?
- Carpets, furniture, white goods (such as fridges, dishwashers) and services (such as architect’s fees) with a VAT rate of 23% don’t qualify. Materials a Homeowner buys such as paint, tiles and so on, don’t qualify.
Who can claim a tax credit under the Incentive?
Owner occupiers of a main home, 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 must be on Revenue’s Local Property Tax Register as an Owner or joint Owner of the main home.
If I don’t pay tax but pay USC, can I claim the tax credit?
No.The tax credit is only available againist Income Tax paid.
If I’m on a Pension can I claim the tax credit?
Yes if you are on occupational pension & pay Income Tax yor can claim.
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.
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 for owner occupires.
If I pay for works for my parents, who don’t pay tax, can I claim the tax credit.
No.The credit is only available to owner occupire of the main house.
If I live with my parents, who own the main residence and I pay for works, can I claim the tax credit?
No. The tax credit is only available to owner occupire of the house.
Can a Contractor claim the tax credit for works the Contractor does on their own home?
As a self employed Contractor you cannot pay yourself for works you do on your main home. However, if you have a limited company and you engage the limited company to carry out the works, provided the works are paid for by you and accounted for by the limited company, the works will qualify and you will be eligible to claim the tax credit against your personal Income Tax.
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 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).