The Home Renovation Incentive (HRI) provides tax relief for you by way of an income tax credit at 13.5% of qualifying expenditure on:
• renovation, or
• improvement works.
These works must be carried out on your main home by HRI qualifying Contractors. The amount of your HRI tax credit depends on the amount you spend on qualifying works.
You need to spend over €4,405 (before VAT) to qualify for the HRI tax credit. This €4,405 (before VAT) can be the total from any number of jobs carried out and paid for from 25 October 2013 to 31 December 2015. You can spend as much as youlike but you can only claim the HRI tax credit on amounts up to €30,000 (before VAT)
To qualify for the HRI, you must be an owner-occupier and the work must be carried out on your principal private residence. You must be up to date with your obligations under the Local Property Tax and, if applicable, the Household Charge. You must be paying income tax – whether under PAYE or self-assessment – to avail of the HRI.
Any contractor you use must be registered for Value Added Tax (VAT) in Ireland and be tax-compliant. Revenue has published a checklist for contractors. If several contractors, such as a builder, a plumber and an electrician, carry out qualifying work on your home, you can combine the cost of the works to make up the minimum qualifying amount – see Rates below.
The type of work that qualifies for the HRI is repair, renovation or improvement work that is subject to VAT at 13.5%. This includes extensions, garages and attic conversions; the supply and fitting of kitchens, bathrooms and built-in wardrobes; fitting of windows; plumbing, tiling, rewiring and plastering.
If you are having your septic tank repaired or replaced, or are installing a radon gas mitigation solution, these types of work also qualify for the HRI. Work on driveways and on rainwater harvesting systems can also qualify.
Work that is subject to VAT at 23% (such as architect’s fees) is not covered. Neither are items such as furniture, white goods or carpets.
If you are unsure about whether your works will qualify, contact your Revenue office – see where to apply below.
In general, the work must be carried out and paid for between 25 October 2013 and 31 December 2015. (However, if planning permission is required and is in place by 31 December 2015, work paid for up to 31 March 2016 will qualify.) Qualifying work between 25 October 2013 and 31 December 2013 will be treated as if it was carried out and paid for in 2014.
Note: for qualifying work that was carried out and paid for between 25 October 2013 and 10 April 2014, you can only claim the credit if your contractor has recorded the details on Revenue’s HRI online system by 8 May 2014.
In general, the tax credit will be payable over the 2 years following the year in which the work is carried out and paid for. If you are a PAYE taxpayer, the amount of the allowable credit will be included in your annual Tax Credit Certificates for the 2 years following the year in which the work is carried out. If you are a self-assessment taxpayer, it will be incorporated into your tax assessment for the 2 years following the year in which the work is carried out.
The qualifying work must cost at least €4,405 before VAT at 13.5%, which adds to a total of €5,000 with VAT included. You will only get the tax credit in relation to a maximum of €30,000 (before VAT) during the 2 years covered by the HRI.
The minimum credit is €595, based on the minimum qualifying expenditure of €4,405. The maximum is €4,050, based on the maximum qualifying expenditure of €30,000.
If you are claiming a grant for the works, or if they are covered by an insurance claim, the amount of your expenditure that qualifies for HRI will be reduced
HOW TO APPLY
You can claim the HRI tax credit after the end of the tax year if your qualifying expenditure has reached the minimum amount of €4,405 before VAT (a total of €5,000) and you have paid income tax. Any unused tax credit can be rolled over into the following year. 2015 will be the first year in which you can claim a HRI credit. The claims system is due to be available from early 2015.
For you to be able to claim the HRI credit, your contractor(s) must enter details of the work on the HRI online administration system. This system is only accessible to contractors who are registered for VAT and are tax-compliant.
Revenue advises homeowners to log in to HRI online to check that that their contractors have correctly entered details of the works and payments.
You should also:
- Ensure that you have paid or arranged to pay any Local Property Tax (LPT) or Household Charge that is due
- Check that your contractor has a VAT number and is tax-compliant – see Revenue’s FAQs for details of the proof required
- Ensure that the work qualifies – see Rules above
- Keep all supporting documentation – tax clearance certificates, estimates, receipts etc.
- Give the contractor the LPT Property ID of your property but not your PIN or PPSN