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Home Renovation Incentive

What is the Home Renovation Incentive Scheme (‘HRI’)?

The HRI provides tax relief for homeowners via an income tax credit. It will run from 25 October 2013 to 31 December 2016 for Homeowners and from 15 October 2014 to 31 December 2016 for Landlords. The Incentive provides for tax relief 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 works must cost a minimum of €4,405 (before VAT) per property, which will attract a credit of €595 per property. Where the cost of the works exceeds €30,000 (before VAT) per property, a maximum credit of €4,050 per property will apply.

The credit is payable over the two years following the year in which the work is carried out and paid for. The first year for HRI tax credits is 2015 for Homeowners and 2016 for Landlords.

 

Who is eligible for the HRI credit?

  • 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.

  • Any owner occupier of a main home who pays Income Tax, including people in receipt of an occupational pension.

  • You will not qualify for the HRI credit if your contractor is not a HRI qualifying contractor.

 

How does HRI work?

To qualify for HRI the homeowner must ensure they engage tax-compliant contractors as the contractor informs Revenue about the work and payments. Before work starts you should:

  • Tell the contractor that you will be applying for a tax credit under the HRI scheme for the work completed

  • Ask the contractor to confirm that s/he is participating in the scheme and will enter the details of the work on the HRI online system

  • Give your Property ID to your contractor

  • The contractor will enter the work details on the HRI online system

  • Login to the HRI online system to check that the work details have been entered

 

After work starts:

  • The contractor will enter the payment details on the HRI online system

  • You should check that the payment details have been entered on the HRI online system.

 

What works qualify?

Examples of repair, renovation or improvement works that qualify under the HRI include (once carried out by a qualifying contractor):

  • 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 report or upgrade

  • Supply and fitting of built in wardrobes

 

What type of home qualifies?

A qualifying home is:

  • A homeowner’s main home, which the homeowner must own and live in

OR

  • A second-hand home, which the homeowner has bought and will live in as the homeowner’s main home after the works have been carried out.

 

How will you receive your tax credit?

After making your claim for the HRI tax credit through the online claim system, the tax credit will be included in your tax credits over two years. If you pay Income Tax through the self-assessment system, your HRI tax credit will be divided equally between the two years. If you pay Income Tax through the PAYE system, your HRI tax credit will be spread evenly throughout both years.

 

More information can be found at: http://www.revenue.ie/en/tax/it/reliefs/hri/  

 

 

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