Would you like to get some home renovations done for Christmas? Perhaps you’ve been thinking of a new fireplace, a new kitchen, knocking two rooms into one or converting an attic into a bedroom for some time. The thing is if you can get them done by December 2016, you can save up to €4000 on the work completed by applying for the Home Renovation Incentive scheme.
Really? Tell me more
That’s right, the Home Renovation Incentive allows you, as a homeowner or landlord, to claim tax relief on repairs, renovations or improvement work on your main home or rental property. The work must be completed between 25 October 2013 and 31 December 2016 for homeowners and between 15 October 2014 and 31 December 2016 for landlords. The person doing the work must be a tax-compliant contractor and the works must be subject to 13.5% VAT.
How do I get the money back?
It comes in the form of a tax credit and is set against your income over two years. It effectively reduces the VAT to zero but it doesn’t mean you get a cheque back for up to €4,000.
What are the other conditions?
You must be up to date with your Local Property Tax payments and if applicable, the household charge. You must be paying income tax either as PAYE or self employed to avail of it.
The minimum spend is €4,405 with a credit of €595. The maximum is a spend of €30,000 with a credit of €4,050. You can, of course, spend more than that on the works but you can only claim on a spend of €30,000.
I’m waiting for planning permission for an extension. Can I still claim the HRI?
If the planning permission is in place by 31 December 2016, the work completed by 31 March 2017 will qualify.
I want to get a new kitchen. Does this qualify?
That depends. You can’t claim on the kitchen units if you purchase them separately to the builder installing them. However, if the builder/kitchen company builds and installs the kitchen, then you can claim.
What other work would not qualify?
White goods, electrics and bathroom components are not applicable if purchased separately however if your plumber or kitchen installer was to supply them, the VAT rate is 13.5% and then they would qualify as long as they are tax-compliant contractors.
What type of renovations works do qualify?
You can build an extension (once planning permission is in place of course), convert an attic, landscaping, home office installation, plastering, painting, joinery, decorating, tiling, removal and installation of new windows, a new driveway or driveway repairs, septic tank replacement or repairs, boiler installations, solar panels, even the building of a garage.
Is there lots of paperwork involved?
No. Most contractors are accustomed to doing these and will help you to complete the paperwork. You will have to provide evidence that you are a tax-compliant home owner.
More details are available on the Citizens Advice website. And of course, if you’re looking for quotes from rated tradesmen for any repairs, building work or renovations, do use our website to receive up to four quotes. You could be enjoying a new fireplace, a beautiful new kitchen or bathroom or even an extra bedroom before Christmas if you make enquiries now.