What is the Home Renovation Incentive (HRI) Scheme?
The Home Renovation Incentive (HRI) Scheme provides for tax relief for Homeowners and Landlords by way of an Income Tax credit at 13.5% of qualifying expenditure on repair, renovation or improvement works carried out on a main home or rental property by qualifying Contractors.
The amount of the HRI tax credit depends on the amount spent on qualifying works. Tax relief can be claimed on qualifying expenditure over €4,405 (before VAT at 13.5%) per property. 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 2016 for Homeowners claiming on their main home and on or after 15 October 2014 and up to 31 December 2016 for Landlords claiming on their rental property. While there is no upper limit on expenditure on qualifying works, the tax credit will only be given in relation to a maximum of €30,000 (before VAT at 13.5%) per property.
If a Homeowner or Landlord is having qualifying work done but isn’t spending over €4,405 (before VAT) on the property, it’s still worth choosing a HRI qualifying Contractor and having the work details entered on HRI online. The Homeowner or Landlord may have more qualifying work carried out on the property between now and 31 December 2016. All the spending on the property, added up, could reach the €4,405 (before VAT). It will be very difficult to go back to a Contractor, to try to get him or her to enter details to HRI online, for a job from a year or more ago.
In addition, if a Homeowner or Landlord is using a HRI qualifying Contractor, the Homeowner or Landlord can at least be sure that the Contractor is tax compliant.
If there are no grants or insurance claims, the lowest tax credit amount is €595 (€4,405 at 13.5%) per property and the highest tax credit is €4,050 (€30,000 at 13.5%) per property.
If a Homeowner or Landlord paid €3,800 (before VAT) to a HRI qualifying electrician for rewiring his or her main home or rental property and €800 (before VAT) to a HRI qualifying painter for painting work on his or her main home or rental property, the tax credit is €4,600 x 13.5% =€621.
2015 will be the first year for HRI tax credits for Homeowners and 2016 for Landlords. In general, the HRI tax credit will be included in tax credits over two years, starting the year after the work is carried out and paid for.
Qualifying works carried out between 25 October 2013 and 31 December 2013 and paid for by Homeowners during that period will be treated as if they were paid for in 2014 for tax credit purposes.
Qualifying works carried out between 15 October 2014 and 31 December 2014 and paid for by Landlords during that period will be treated as if they were paid for in 2015 for tax credit purposes.
Who can claim a tax credit under the Incentive?
Owner occupiers of a main home or Landlords of rental properties who pay Income Tax under PAYE or self assessment and whose Local Property Tax and Household Charge obligations are up to date, are eligible. The Homeowner or Landlord must be on Revenue's Local Property Tax Register as an Owner or joint Owner of the main home or rental property. Landlords must also have registered the tenancy with the Private Residential Tenancies Board.
If I don't pay tax but pay USC, can I claim the tax credit?
- No. The tax credit is only available against Income Tax paid
If I'm on a Pension can I claim the tax credit?
- If you are on an occupational pension and you pay tax under PAYE, you can claim.
If I don't pay tax, can someone else pay for the works and claim the tax credit?
- No. The tax credit is only available to the Homeowner or Landlord. Where there are joint owners and only some of the owners pay tax, the tax credit can be claimed by those paying tax based on qualifying expenditure incurred by them.
If I pay for works for my parents, who don't pay tax, can I claim the tax credit?
- No. The tax credit is only available to the owner occupier of a main home or the owner of a rental property.
If I live with my parents, who own the main residence and I pay for works, can I claim the tax credit?
- No. The tax credit is only available to the owner occupier of the main home or the owner of a rental property.
Can a management company claim for works, for example window replacement on an apartment block?
- No. If the management company pays for the works it won’t qualify as the management company isn't the owner occupier of the main home or the Landlord of the rental property. If the owner occupier or Landlord of an apartment, which is their main home or rental property, pays the Contractor directly for the portion of the works on the main home or rental property, it will qualify.