DID YOU KNOW there’s a tax incentive to renovate your home?

It’s true. It’s called the  ’Home Renovation Incentive‘ and Revenue is offering an income tax credit of 13.5% on qualifying expenditure. It even covers extensions.

Better be quick though – the current incentive runs out in December 2015.

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What is it?

It’s tax relief in the form of an income tax credit of 13.5% over two years for the ‘repair, renovation or improvement’ of your home. It’s available for work carried out between 25 October 2013 and 31 December 2015.

You must spend over €4,405 (before VAT) on qualifying expenditure with eligible tax-complaint contractors in order to avail of the Home Renovation Incentive .

It’s intended to support homeowners who use tax-complaint contractors to carry out works on their homes. This means you need to tell your contractor you’re availing of the scheme before works start.

What is a qualified expenditure?

You have to spend between a minimum of €4,050 (before VAT) and a maximum of €30,000 (before VAT) on qualifying works (see chart below) to receive income tax credits of 13.5% applied over the next two years.

Services must have a VAT rate of 13.5% to qualify.

Revenue Revenue

What doesn’t qualify? 

Services with a VAT rate of 23% such as architects fees, carpets, furniture or white goods. Materials (tiles, paint, etc) that you buy yourself won’t be included in the calculation of the qualifying expenditure.

What type of property qualifies?

• Your main home – which you must own and live in.
• A second home –  which you have bought and will live in once the works are carried out 
• A rental property you own that will be rented out within six months of works being completed. It must be registered with the PRTB (Private Residential Tenancies Board) also.

What properties don’t qualify?

• Holiday homes
• New builds
• Works to an uninhabitable property, whether it’s refurbishment or reconstruction

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How much can I claim for?

Here’s a chart from the Revenue breaking down how the tax credits work:

Revenue Revenue

What do I have to do?

• Tell the contractor you’re availing of the HRI scheme and make sure the contractor is participating on the scheme
• Both you and the contractor have to enter details about the works online
• Give your contractor the Property ID of your property
• You can check at HRI online if the details have been entered
• The contractor will enter payment details at HRI online
• The year after the works have been paid for you can claim your HRI tax credit online

What if my works don’t add up to €4405 after VAT?

You should still use a tax-complaint contractor as you may do more renovations or extensions to your home before the deadline that could bump you up over the minimum.

It’s really important that your contractor is HRI compliant.

As the Revenue says:

Revenue Revenue

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