What is the Home Renovation Incentive Scheme(‘HRI’)?

The HRI provides tax relief for homeowners via an income tax credit at 13.5% of qualifying expenditure on repair, renovation or improvement works carried out on their main home by a qualifying contractor.  The VAT rate on works carried out must be 13.5%.

How much qualifies for the HRI credit?

The amount of the HRI tax credit depends on the amount actually spent on the qualifying works. Tax relief can be claimed on qualifying expenditure over €4,405 (before VAT of 13.5%). The qualifying expenditure can come from any number of jobs carried out and paid for from 25th October 2013 to 31 December 2015. There is no upper limit on the expenditure however you will only be able to claim the tax credit on a maximum spend of €30,000.

For example, if you paid

€3,000 (before VAT) to a HRI qualifying builder to convert your attic

€1,000 (before VAT) to a HRI qualifying carpenter for built-in wardrobes

€900 (before VAT) to a HRI qualifying painter for painting work

your HRI tax credit would be €4,900 x 13.5% = €661.50

In general, the HRI tax credit will be included in your tax credits over two years, starting the year after the work is carried out and paid for.

Who is eligible for the HRI credit?

  Owner occupiers of a main home who pay Income Tax under PAYE or self-assessment and whose Local Property Tax and Household Charge obligations are up to date

 Any owner occupier of a main home who pays Income Tax, including people in receipt of an occupational pension
►  You will not qualify for the HRI credit if your contractor is not a HRI qualifying contractor

 How does HRI work?

To qualify for HRI the homeowner must ensure they engage tax-compliant contractors as the contractor informs Revenue about the work and payments. Before work starts you should:

  • tell the contractor that you will be applying for a tax credit under the HRI scheme for the work completed
  • ask the contractor to confirm that s/he is participating in the scheme and will enter the details of the work on the HRI online system
  • give your Property ID to your contractor
  • the contractor will enter the work details on the HRI online system
  • login to the HRI online system to check that the work details have been entered

After work starts:

  • the contractor will enter the payment details on the HRI online system
  • you should check that the payment details have been entered on the HRI online system

The year after the work is carried out and paid for you should log in to the HRI online system and claim your HRI tax credit. The online system to claim the HRI relief will be available from early 2015 but any qualifying work already carried out should be entered on the system.

What works qualify?

Examples of repair, renovation or improvement works that qualify under the HRI include (once carried out by a qualifying contractor):

  • Painting and decorating
  • Rewiring
  • Tiling
  • Supply and fitting of kitchens
  • Extensions
  • Garages
  • Landscaping
  • Supply and fitting of solar panels
  • Conservatories
  • Plastering
  • Plumbing
  • Bathroom upgrades
  • Supply and fitting of windows and doors
  • Attic conversions
  • Driveways
  • Septic tank repair or replacement
  • Central heating system report or upgrade
  • Supply and fitting of built in wardrobes

What type of home qualifies?

A qualifying home is:

  • a homeowner’s main home, which the homeowner must own and live in

OR

  • a second-hand home, which the homeowner has bought and will live in as the homeowner’s main home after the works have been carried out.

 When should the works be carried out?

Qualifying works must be carried out on or after 25th October 2013 and up to 31st December 2015. Where planning permission (if required) is in place by 31st December 2015, works carried out up to 31st March 2016 will qualify for the relief. If works were in progress on 25th October 2013, only the portion of the works carried out and paid for on or after 25th October 2013 qualify.

How will you receive your tax credit?

After making your claim for the HRI tax credit through the online claim system, the tax credit will be included in your tax credits over two years. If you pay Income Tax through the self-assessment system, your HRI tax credit will be divided equally between the two years. If you pay Income Tax through the PAYE system, your HRI tax credit will be spread evenly throughout both years.

More information can be found at: http://www.revenue.ie/en/tax/it/reliefs/hri/