Home Renovation Incentive
The best way to explain it is to take an example. Say you’re going to get several minor jobs done. Perhaps insulation, or some rewiring, maybe even a window glass upgrade. Basically any works that can be considered renovation, improvement or repairs qualify.
The bad news is that you have to spend a minimum of €4,405 (ex-VAT) which comes to a total of €5000 with VAT included. But the good news is that amount could be spread out over several months, up to December 2018. You can spend up to €30,000 (before VAT) on your scheme of works.
For example, if you paid €3,800 (before VAT) to EnerGlaze for upgrading your old window glass and €800 (before VAT) to a HRI qualifying painter for painting work on your home or rental property, your HRI tax credit is €4,600 x 13.5% = €621.
Before work starts, you must tell the contractor that you will be applying for a tax credit under the HRI scheme for the work done. Ask him to confirm that he is participating in the scheme and will enter the details of the work on the HRI online registration system.
In effect, as the VAT charged on this kind of work is 13.5%, Revenue are giving you back your VAT and encouraging householders not to support the black economy.
The scheme is open to landlords and covers rental units, but not holiday homes. For more details click here.
How to apply
Claiming the credit
You can claim the HRI tax credit after the end of the tax year if your qualifying expenditure has reached the minimum amount of €4,405 before VAT (a total of €5,000) and you have paid income tax. Any unused tax credit can be rolled over into the following year.
In general, the tax credit is payable over the 2 years following the year in which the work is carried out and paid for. If you are on PAYE, your HRI tax credit will be divided evenly across your pay dates for each of the 2 years that it is payable. If you are a self-assessed taxpayer, it will be included in your self-assessment over 2 years, half the tax credit each year.
- For homeowners, 2015 was the first year in which you could claim a HRI credit
- For landlords, 2016 was the first year in which you could claim a HRI credit
For local authority tenants, 2018 will be the first year in which you can claim a HRI credit – this will be for payments made in 2017. Further information will be published shortly. In the meantime, you should contact your Revenue office for information.
Details of the work
For you to be able to claim the HRI credit, your contractor(s) must enter details of the work on the HRI online administration system. This system is only accessible to contractors who are registered for VAT and are tax compliant.
Revenue advises applicants to log in to HRI online (see ‘Where to apply’ below) to check that their contractors have correctly entered details of the works and payments.
You should also:
- Ensure that you have paid or arranged to pay any due Local Property Tax
- Check that your contractor has a VAT number and is tax compliant
- Ensure that the work qualifies – see ‘Qualifying work’ above
- If you are a local authority tenant, get written authorisation from the local authority before getting any work done
- Keep all supporting documentation – tax clearance certificates, estimates, receipts etc.
- Give the contractor the LPT Property ID of your property but not your LPT PIN or your Personal Public Service Number
Where to apply
If you are a local authority tenant, you should contact your Revenue office for information.
If you need to check whether your work qualifies for the HRI, use the Revenue Contact Locator to locate your Revenue office.