The Home Renovation Tax Incentive (HRI) can now help you save as much as €4,050 on an expenditure of €30,000 excluding Vat, offering a tax credit of 13.5% on renovation or extension. Labour by a tax-compliant contractor at 13.5% Vat is also allowed. Between now and the end of 2015, you can claim up to €30,000 ex VAT. This new tax relief can help you get your home in ship-shape.
To avail this relief, it is important that the Property Tax must be settled and up to date, and the home must be your main private residence. Holiday homes and rental properties are entitled for this relief. Even furniture, carpets and white goods are not eligible as expenses.
The scheme extends till Mar 31, 2016 for people who have planning permission before the end of December 2015. The scheme was announced on October 25, 2013. For one who started work at that time, the work will be considered as to be done in 2014, as it is most expected to be complete before the end of this year. Accordingly, 50% of the tax credit will be given for 2015 and the other for 2016.
So, if your minimum expenditure (ex Vat) is €5,000, you can receive €675 back over two years after the work is complete. €20,000 of expenditure would be refunded at around €2,700. Hence, the HRI can be considered as a Vat rebate included in the tax assessment for the two years following the completion of the work.
It is mandatory for the contractor or builder carrying out work to be tax compliant with a current Revenue Notice of Determination of zero or 20% RCT Rate. If you are going to work with unregistered local tradesman, it will improve the standards for small extensions, renovations or repairs.
|