Home Renovation Initiative
1.1. What is the Home Renovation Incentive (HRI)?
The Home Renovation Incentive (HRI) provides for a tax credit for Homeowners on repair, renovation or improvement work carried out on the Homeowner’s principal private residence.
1.2. Who can carry out work under the incentive?
Building Contractors who are VAT registered in Ireland and tax compliant, which means they have an up to date (within the last 30 days) Revenue Notice of Determination of zero or 20% RCT Rate, are eligible to carry out work under the incentive. An in-date Tax Clearance Certificate is also acceptable until such time as Revenue’s new online system is in place.
1.3. Who can claim a tax credit under the incentive?
Owner occupiers of a principal private residence whose LPT and Household Charge obligations are up to date are eligible.
1.4. What is a principal private residence for the purpose of the incentive?
A house and gardens is considered to be a principal private residence provided the house has been occupied by the Homeowner as his/her only or main residence during the Homeowner’s period of ownership. A Homeowner can only have one principal private residence at any one time.
1.5. When does the incentive begin and how long will it last?
The incentive applies to repair, renovation or improvement work carried out and paid for on or after 25 October 2013 and up to 31 December 2015. Work carried out and paid for on or after 25 October 2013 and up to 31 December 2013 will be treated as if it was carried out and paid for in 2014 for tax credit purposes. Where planning permission (where required) is in place by 31/12/2015, work paid for up to 31 March 2016 will qualify.
1.6. When is the credit payable?
In general, the credit is payable over the two years following the year in which the work is carried out and paid for (See1.5.).
1.7. What does qualifying expenditure mean?
Qualifying expenditure means expenditure incurred by the Homeowner on qualifying work (see 1.8.) carried out by a qualifying contractor (see 1.2.).
1.8. What does qualifying work mean?
Qualifying work means repair, renovation or improvement work, which is subject to VAT at 13.5%, carried out on a Homeowners principal private residence.
1.9. What type of work is covered?
The type of work includes extensions, garages, attic conversions, supply and fitting of kitchens, bathrooms and built in wardrobes, window fitting, plumbing, tiling, rewiring and plastering.
1.10. What is NOT covered?
Items such as furniture, white goods and carpets are not covered as well as work which is subject to VAT at 23%.
1.11. Is there a minimum and maximum amount for the repair, renovation or improvement work?
Qualifying work must cost a minimum of €5,000 (excluding VAT at 13.5%). While there is no upper limit on the cost of work, the tax credit will only be given in relation to a maximum of €30,000 (excluding VAT at 13.5%).
1.12. If I engage multiple Contractors for example a builder, a plumber and an electrician, either at the same time or over the course of a year and the total qualifying work costs €5,000 excluding VAT, does this qualify?
Yes. As the cost of the qualifying work in total is €5,000 (excluding VAT at 13.5%), the work qualifies. Each Contractor must be VAT Registered in Ireland and must have an up to date (within the last 30 days) Revenue Notice of Determination of zero or 20% RCT Rate and must engage with the Revenue electronically when the new online system is in place. (See 4.1. transitional arrangements)
1.13. If qualifying work of €30,000 is carried out and paid for in 2014 and a further €30,000 in 2015, can I claim tax credit on both?
No. The limit of €30,000 (excluding VAT) applies per principal private residence for the duration of the incentive.
1.14. Is there a minimum and maximum tax credit?
The minimum tax credit is €675 (based on qualifying expenditure of €5,000 excluding VAT x 13.5%) and the maximum is €4,050 (based on qualifying expenditure of €30,000 excluding VAT x 13.5%). The tax credit is non refundable so any unused tax credit will roll forward to the next year. The tax credit is generally payable over the two years following the year in which the work is carried out (See 1.5).
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