Home Renovation Incentive (HRI)
The Home Renovation Incentive (HRI) is a new initiative that was introduced in Budget 2014. The good news is that Homeowners can avail of a Better Energy Homes grant and the Home Renovation Incentive.
The HRI provides a tax credit of 13.5% for Homeowners on repair, renovation or improvement works carried out on their principal private residence. It applies to works carried out and paid for on or after the 25th October 2013 and up to 31st December 2015.The work must cost a minimum of €5,000 (excluding VAT) and while there is no upper limit to the cost of the work, the tax credit will only be given in relation to a maximum of €30,000 (excluding VAT). The work must be completed by a contractor who is VAT registered and fully tax compliant.If a Homeowner is availing of both a Better Energy Homes grant and the HRI, please note that 3 times the value of the grant payment must be deducted from the eligible expenditure. For example:
A couple spend €20,000 (excl. VAT) on renovation works and they get a grant from SEAI of €1,100. They simply subtract three times the grant (€1,100 x 3 = €3,300) from the total spend (€20,000) and the remaining amount of €16,700 (€20,000 - €3,300 = €16,700) qualifies for a tax credit of €2,254.50 (€16,700 x 13.5% = €2,254.50).
Any queries relating to the HRI should be directed to Revenue and more information is available at: http://www.revenue.ie/en/tax/it/reliefs/hri/hri-contractor-faqs.html
New scheme means homeowners are less likely to use the shadow economy for building works according to construction groups including The Irish Green Building Council.