Are you considering renovating or extending your existing house?
If so, the Home Renovation Incentive allows you to claim tax credits on the VAT.
Items that qualify include:
- Building an extension.
- Attic conversions.
- Garage construction.
- Window replacement
- Plumbing and electrical work.
- Tiling, plastering.
- Insulation works.
- Repair works also qualify.
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 13.5% 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 Society of Chartered Surveyors Ireland (SCSI) have published these useful and concise guidance documents to the Home Renovation Incentive Scheme . Included is the Home Renovation Incentive Scheme Calculator which includes some case studies included as to how to calculate the tax rebate if applicable.
The scheme will run from 25 October 2013 to 31 December 2015. The credit is payable over the two years following the year in which the work is carried out and paid for. 2015 will be the first year for HRI tax credits. Homeowners must be Local Property Tax and Household Charge compliant in order to qualify under the Incentive. Contractors must be VAT and RCT registered and tax compliant in order to qualify to carry out works under the HRI.
Your tax credit is 13.5% of the qualifying expenditure before VAT. It will begin in the year after the work is carried out and paid for. Your HRI 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 evenly between the two years. If you are on PAYE, your HRI tax credit will be spread evenly throughout each year.
A claim for tax relief must be made within four years after the end of the tax year to which the claim relates.