The Home Renovation Incentive provides for tax relief for homeowners and landlords by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a your main residence or a property that you rent out, provided the work is done by a qualifying contractor. Also, any property you rent out must be occupied by a tenant and registered with the Residential Tenancies Board (RTB) within 6 months of work being carried out.
The following is a summary of the principal features of the Incentive, as follows:
It runs until the 31st December 2018
The type of work that qualifies for the Home Renovation Incentive include:
Painting, decorating, and tiling
Plastering, plumbing and rewiring
Extensions and attic conversions
Garages, driveways and landscaping
Septic tank repair or replacement
The types of work that don’t qualify are goods or services provided by your contractor that have a Vat rate of 23% such as carpets, furniture, appliances and services such as architects fees. Also, you cannot claim for work or materials that you provide yourself.
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 and landlords will be between €595 minimum and €4,050 maximum.
You may have a single rental property that is converted into multiple rental units, each rental unit is treated separately for the HRI. The maximum of €30.k applies to each of the rental units.
If any work done is grant aided or any insurance/compensation proceeds are received then the amount of relief will be reduced.
You must make any claim through the Revenue HRI system which can be accessed on Revenue MyAccount (if PAYE) or ROS (if self employed). You can only do so if you have the property registered for the Local Property Tax.
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. If you cannot use the tax credit in the two years then it can be carried forward to later years.
Building Contractors must be VAT registered and tax compliant to carry out any work under the Incentive. You should ensure your contractor is a qualifying contractor otherwise you won’t be able to claim the HRI tax credit.
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 in respect of any work.
Homeowners and Landlords will be able to view the information provided to Revenue by the Contractor through the on-line HRI system in place and can claim the relief through that system.
I hope you find this useful and if you have any questions or need advive, feel free to contact me.