A Note on The Home Renovation Incentive
The Home Renovation Incentive (HRI), as announced by the Government in the last budget and introduced in the Finance Act (No. 2) Act, 2013, provides for tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a homeowner’s only or main residence.
The following is a summary of the principal features of the Incentive, as follows:
a) It runs until the 31st December 2015
b) It provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure on the repair, renovation or improvement work carried out on a homeowner’s only or main residence
c) To qualify for the relief, the work must cost a minimum of €4,405 excluding Vat up to a maximum expenditure of €30,000 excluding Vat. Therefore the tax relief available to homeowners will be between €595 minimum and €4,050 maximum
d) If any work done is grant aided or any insurance/compensation proceeds are received then the amount of relief will be reduced
e) The tax relief will be granted over the two years following the year in which the work is paid (or deemed to be paid), 50% in each year
f) Building Contractors must be VAT registered and tax compliant to carry out any work under the Incentive
g) Building Contractors must inform Revenue in advance of the details of any work to be carried out and will be required to notify the Revenue of any payments respect of any work
h) Homeowners will be able to view the information provided to Revenue by the Contractor through the on-line system in place and can claim the relief through that system.
I hope you find this briefing useful and if you have any questions, do feel free to contact me.
Timothy Kelliher Chartered Accountant