Tax Incentive For Home Improvement

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According to the Irish Examiner, last month Revenue announced an extension of the Home Renovation Incentive (HRI) that is due to finish by the end of the year. The extension will last until December 31, 2016 as the government’s way of encouraging people to work with tax compliant contractors instead of paying cash into the black economy as what happened during the recession.

In order to qualify for the scheme the minimum spend for home renovation must be €5,000 including VAT. This will entitle a homeowner to a tax credit of €595. Spending €30,000 equates to a maximum tax credit of €4,050. There are no limitations to spending for home improvements but there is no VAT refund beyond the maximum amount.

When the government announced the extension of the Home Renovation Incentive, works on 36,543 properties were notified to the Revenue HRI online system. This represents more than $566 million worth of projects involving about 5,975 contractors. If you considering having some work done on your home, it makes sense to look at this tax scheme.

Homeowners who contracted tax compliant contractors can claim VAT for their home renovations over the next two years. This means that 13.5% of the spending will be returned in the form of tax credit. 50% will be returned on the year the project was carried out and the remaining 50% on the following year.

If you decide to have work carried by a compliant contractor under the scheme, the contractor must enter the details of the work online. It is not the homeowner who will enter the details although he has to provide the Property ID. A compliant contractor has to the mobile app that easily allows update of work details on the HRI website. Repairs, renovations and improvement work qualify under the scheme including septic tank repair or replacement, attic conversions, driveways, painting and decorating.

In Western Australia, a home improvement project can be undertaken by house extension Perth. While there is no tax incentive for home renovations, quality and creative improvements can increase the home’s resale value. Premium service can be provided for a highly competitive price.

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