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Home Renovation Scheme

Home RenovationWhat is the Home Renovation Incentive (HRI)?

WOULD you appreciate getting €4,050 handed back to you by the Government for that home improvements that you've been planning for years?

The Home Renovation Incentive Scheme (HRI) lets homeowners can save 10pc on construction and up-grading work at a time when labour costs for home improvements are at their lowest in 15 years. These works must be carried out on your main home or rental property by HRI qualifying Contractors.

The scheme allows a VAT claw-back of up to €4,050 on the 13.5pc VAT rate applied to work costing between €5,000 and €30,000 (before Vat).

How Much Money Can You Save?

The reclaim is 13.5pc on qualifying expenditure between €5,000 and €30,000 (before Vat). You can commission jobs to any cost – €100,000 if you like – but only the VAT on the first €30,000 is applicable. The minimum amount reclaim-able is €595 while a maximum credit reclaim limit of €4,050 applies. Do you qualify? To qualify for the HRI you must be a fully tax compliant home owner. If you are self-employed then you must show that your returns are up to date. If you are a PAYE worker then your compliance should be already evident to Revenue and your tax details already supplied to you.

But that's not all. Your residential property tax must also be paid fully to date. Also, if you have dodged the previous Household Tax you are also excluded although Revenue allow for both to be paid up in order to qualify yourself for HRI.

Does Your Home Qualify?

A qualifying property is:

  • -Your main home, which you must own and live in, or
  • -A second hand home, which you have bought and will live in as your main home after the works have been carried out.
  • -Your rental property which must be, or will be within 6 months of the completion of the works, occupied by a tenant and registered with the Private Residential Tenancies Board.
What type of property doesn’t qualify?
You can’t get the HRI tax relief on:
-Holiday homes
-New builds
-A refurbishment or reconstruction of an uninhabitable house.
What Does Qualify?
They key rule is anything that qualifies for the 13.5pc rate of Vat is applicable but anything that qualifies for the 23pc rate is not applicable
Examples of repair, renovation or improvement works that qualify under the Incentive include:
-Painting and decorating Plastering
-Rewiring Plumbing
-Tiling Bathroom upgrades
-Fitted kitchens Window replacement
-Extensions Attic conversions
-Garages Driveways
-Landscaping Septic tank repair or replacement
What type of works don’t qualify?
Carpets, furniture, white goods (such as fridges, dishwashers) and services (such as architects’ fees) with a VAT rate of 23% don’t qualify. Materials you buy yourself such as paint, tiles and so on, will not be included when working out the qualifying expenditure.
How do I know my Contractor is a ‘HRI qualifying’ Contractor?
A HRI qualifying Contractor is one who is participating in the HRI. This means the Contractor is registered for VAT and is tax compliant. You will know your Contractor is a HRI qualifying Contractor when you check HRI online and see the work details the Contractor entered.
Once you see the details on HRI online, you know the Contractor qualifies.

What should I give to my Contractor?

Before any works start, you should give your Contractor details of your Property ID (which was included on any Local Property Tax (LPT) letters from Revenue) as well as rental property details (see section 2). Your Contractor will need the Property ID to enter your works and payments details on HRI online.

What does my Contractor have to do?

Before any works start, your Contractor should enter details on HRI online of all qualifying works he or she is about to carry out for you. After the work starts and as you pay for the work, your Contractor should enter details of the payments to HRI online. You should ask your Contractor to enter the payments as soon as possible.

How do I make my claim?

You can claim your HRI tax credit through HRI online the year after the work is carried out and paid for. For Landlords, works carried out and paid for from 15 October 2014 to 31 December 2014 are classed as 2015. Your Local Property Tax and Household Charge must be up to date at the time of the claim.

How will I receive my tax credit?

Your HRI 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 evenly between the two years. If you are on PAYE, your HRI tax credit will be spread evenly throughout each year. Your HRI tax credit is 13.5% of the qualifying expenditure before VAT. It will begin in the year after the work is carried out and paid for.

For example:

You hired Cremur to carry out a bathroom renovation on your home for €10,000 (before VAT at 13.5%).

The work was carried out and paid for in April 2014. Your builder entered the details to HRI online. You hired a HRI qualifying painter to carry out painting on your home for €2,000 (before VAT at 13.5%). The work was carried out and paid for in September 2014. Your painter entered the details to the HRI online.

-You claim your HRI tax credit in January 2015.

-Your HRI tax credit is €12,000 x 13.5% = €1,620.

-You receive your HRI tax credit of €810 in 2015 and €810 in 2016.

-If you are on PAYE, your HRI tax credit will be divided evenly across your pay dates for each year.

-If you don’t use all of your HRI tax credit in any year, it won’t be refunded to you but the unused amount will be given as a HRI tax credit in the next and following  years.



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