IN LAST year’s budget, the Government extended the Home Renovation Incentive Scheme. This is brilliant news for anyone who’s got work that needs to be done around the house, but not necessarily the budget to make it happen. With this scheme, you can get tax breaks for everything from replacing your floors to installing a new kitchen or bathroom, providing the work is done by a contractor that’s registered with Revenue. The bottom line is, you end up with more money in your pocket. Win win!
How does it work?
To put it simply, you get tax back on any work that you get done by a registered professional. The rate of return is 13.5% and it’s a rebate against your income tax over a two year period. Basically it means that it cancels out the VAT you had to pay on the renovations. The HRI scheme covers work up to a value of €30k. The scheme runs until the end of 2018.
What do you need to do to qualify?
You need to be a homeowner or landlord. You can’t get tax relief if you carry out renovations on a house you’re renting – the landlord must apply for the scheme.
You need to have paid all your Property Tax.
You need to be a PAYE worker or a self-employed worker paying income tax.
The person carrying out the renovations must be registered to pay VAT.
What kind of renovation work qualifies?
Any renovation or improvements that are subject to 13.5% VAT are eligible for the scheme. This could be a new kitchen, new tiles, new bathrooms – whatever! If your house needs a makeover or simply a lick of paint, you are eligible, as long as the cost of the renovation is at least €4,405 before VAT. The maximum spend you’ll be able to claim on is €30,000 before VAT.
H0w much money will you get back?
You’ll get €595 back if you spend the minimum amount of €4,405 (ex VAT) and if you spend the maximum amount allowed under the scheme, you’ll get €4,050 back. You can claim the HRI tax credit after the end of the tax year as long as you’ve reached the minimum.
How do you claim your money back?
The person who carries out the renovation work must do it for you. They must fill in the details on the HRI system online as it’s only accessible to VAT registered and tax compliant contractors. You need to give your contractor your LPT Property ID of your property but not your LPT PIN or your PPS number. To claim the HRI credit, use the HRI online system, which you access through https://www.ros.ie/myaccount-web/home.html