The Home Renovation Incentive Scheme

HRI Scheme IrelandIn Budget 2014, Minister for Finance Michael Noonan introduced the Home Renovation Incentive Scheme. The scheme is effective from 25 October 2013 and will expire on the 31 December 2016. The Home Renovation Incentive (HRI) provides a tax credit for homeowners on repairs, improvements and renovations carried out on their principal private residence. One of the main reasons this new incentive was introduced was to reduce the competitive advantage that non – tax compliant building contractors have over tax compliant ones. Other benefits of procuring the services of a registered building contractor reduce the risks regarding health and safety.

It is widely accepted that hiring the non tax compliant contractors increases the risks regarding health and safety. Homeowners must also be aware that from 1st August 2013, health and safety regulations were introduced which will see additional obligations imposed on the homeowner. The Home Renovation Incentive will provide an income tax credit on the VAT paid by homeowners carrying out work on their home in the subsequent two years. The credit will be calculated at 13.5pc on qualifying expenditure between €4,405 and €30,000. Where the cost of the work exceeds €30,000 (exclusive of VAT), a maximum credit of €4,050 will apply.

The scheme will support fully tax-compliant builders as the spending and relief will have to be registered with the Revenue Commissioners. Please note that homeowners can only claim the relief under the Home Renovation Incentive if their Local Property Tax and Household Charge obligations are up to date.

Qualifying expenditure as follows,

  • Windows
  • Extensions
  • Attic conversions
  • Plumbing
  • Tiling
  • Supply & fitting of kitchens
  • Plastering
  • Garages
  • Rewiring
  • Insulation
  • Landscaping

Items including furniture, white goods and carpets are not included in the Home Renovation Incentive Scheme.

If you would like more information on this Scheme please visit the Revenue.ie web site.

Case Study example

Demolition works €3,000
Excavation, foundations, rising walls, hardcore, radon €4,200
barrier, insulation, reinforcement, concrete slab External blockwork walls, rendered, insulated €3,600
Internal walls €1,300
Windows and doors €2,900
Heating and plumbing and electrical installation modification€4,800
Floor finishes (tiling) €2,600
New timber roof, roof finish and insulation €4,300
New kitchen and appliances €6,000
New plastered ceilings and walls €4,800
Painting and Decoration (Internal and External full house) €8,000
External works (paved paths, drainage alterations, topsoil) €2,500
Total Refurbishment Costs – excluding VAT €48,000

HRI Calculation – Case Study example

Total Refurbishment Costs – excluding VAT €48,000
Less Costs not applicable under HRI scheme
New kitchen appliances (€1,500)
Total Allowable Costs under HRI Scheme – ex VAT €46,500
HRI Scheme maximum tax credit (€30,000 x 13.5%) €4,050

Total Cost of Refurbishment by Homeowner

Total Cost of Refurbishment (including ineligible costs) €48,000
Less Tax Credit under HRI Scheme (€30,000 x 13.5%) (€4,050)
Net Total Cost to Homeowner after HRI Credit is applied €43,950

If you would like building works carried out on your property and want to avail of this scheme please contact us through our contact page today.