1. General Information for Homeowners, Landlords and Contractors on the Home Renovation Incentive (HRI) Scheme

1.1. What is the Home Renovation Incentive (HRI) Scheme?

The Home Renovation Incentive (HRI) Scheme provides for tax relief for Homeowners and Landlords by way of an Income Tax credit at 13.5% of qualifying expenditure on repair, renovation or improvement works carried out on a main home or rental property by qualifying Contractors.

The amount of the HRI tax credit depends on the amount spent on qualifying works. Tax relief can be claimed on qualifying expenditure over €4,405 (before VAT at 13.5%) per property. This €4,405 (before VAT) can be the total from any number of jobs carried out and paid for from 25 October 2013 to 31 December 2016 for Homeowners claiming on their main home and on or after 15 October 2014 and up to 31 December 2016 for Landlords claiming on their rental property. While there is no upper limit on expenditure on qualifying works, the tax credit will only be given in relation to a maximum of €30,000 (before VAT at 13.5%) per property.

If a Homeowner or Landlord is having qualifying work done but isn’t spending over €4,405 (before VAT) on the property, it’s still worth choosing a HRI qualifying Contractor and having the work details entered on HRI online. The Homeowner or Landlord may have more qualifying work carried out on the property between now and 31 December 2016. All the spending on the property, added up, could reach the €4,405 (before VAT). It will be very difficult to go back to a Contractor, to try to get him or her to enter details to HRI online, for a job from a year or more ago.

In addition, if a Homeowner or Landlord is using a HRI qualifying Contractor, the Homeowner or Landlord can at least be sure that the Contractor is tax compliant.

If there are no grants or insurance claims, the lowest tax credit amount is €595 (€4,405 at 13.5%) per property and the highest tax credit is €4,050 (€30,000 at 13.5%) per property.

For example -

If a Homeowner or Landlord paid €3,800 (before VAT) to a HRI qualifying electrician for rewiring his or her main home or rental property and €800 (before VAT) to a HRI qualifying painter for painting work on his or her main home or rental property, the tax credit is €4,600 x 13.5% =€621.

2015 will be the first year for HRI tax credits for Homeowners and 2016 for Landlords. In general, the HRI tax credit will be included in tax credits over two years, starting the year after the work is carried out and paid for.

Qualifying works carried out between 25 October 2013 and 31 December 2013 and paid for by Homeowners during that period will be treated as if they were paid for in 2014 for tax credit purposes.

Qualifying works carried out between 15 October 2014 and 31 December 2014 and paid for by Landlords during that period will be treated as if they were paid for in 2015 for tax credit purposes.

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1.2. Who can claim a tax credit under the Incentive?

Owner occupiers of a main home or Landlords of rental properties (see 1.5.), who pay Income Tax under PAYE or self assessment and whose Local Property Tax and Household Charge obligations are up to date, are eligible. The Homeowner or Landlord must be on Revenue's Local Property Tax Register as an Owner or joint Owner of the main home or rental property. Landlords must also have registered the tenancy with the Private Residential Tenancies Board.

1.2.1. If I don't pay tax but pay USC, can I claim the tax credit?

No. The tax credit is only available against Income Tax paid.

1.2.2. If I'm on a Pension can I claim the tax credit?

If you are on an occupational pension and you pay tax under PAYE, you can claim.

1.2.3. If my only income is a DSP Pension, can I claim the tax credit?

No. The tax credit is only available if you pay Income Tax under PAYE or Self Assessment.

1.2.4. If I don't pay tax, can someone else pay for the works and claim the tax credit?

No. The tax credit is only available to the Homeowner or Landlord. Where there are joint owners and only some of the owners pay tax, the tax credit can be claimed by those paying tax based on qualifying expenditure incurred by them.

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1.2.5. If I pay for works for my parents, who don't pay tax, can I claim the tax credit?

No. The tax credit is only available to the owner occupier of a main home or the owner of a rental property.

1.2.6. If I live with my parents, who own the main residence and I pay for works, can I claim the tax credit?

No. The tax credit is only available to the owner occupier of the main home or the owner of a rental property.

1.2.7. Can a Contractor claim the tax credit for works the Contractor does on their own home?

As a self employed Contractor you cannot pay yourself for works you do on your main home or rental property. However, if you have a limited company and you engage the limited company to carry out the works, provided the works are paid for by you and accounted for by the limited company, the works will qualify and you will be eligible to claim the tax credit against your personal Income Tax.

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1.2.8. Can a management company claim for works, for example window replacement on an apartment block?

No. If the management company pays for the works it won’t qualify as the management company isn't the owner occupier of the main home or the Landlord of the rental property. If the owner occupier or Landlord of an apartment, which is their main home or rental property, pays the Contractor directly for the portion of the works on the main home or rental property, it will qualify.

1.3. What does qualifying expenditure mean?

Qualifying expenditure means the Homeowner or Landlord is paying for the type of works (see question 1.4.) on the type of residential property (see question 1.5.) and is paying the type of Contractor (see question 1.8. ) covered by the HRI.

For example -

If a Homeowner or Landlord paid €500 (before VAT) to a HRI qualifying plumber for repairs to the central heating system in their main home or rental property, this is qualifying expenditure. The Homeowner’s or Landlord’s total qualifying expenditure must be over €4,405 (before VAT) on the property to claim the HRI tax relief see question 1.7. )

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1.4. What type of works qualify?

Examples of repair, renovation or improvement works that qualify under the Incentive include -

  • Painting and decorating
  • Rewiring
  • Tiling
  • Supply and fitting of kitchens
  • Extensions
  • Garages
  • Landscaping
  • Supply and fitting of solar panels
  • Conservatories
  • Plastering
  • Plumbing
  • Bathroom upgrades
  • Supply and fitting of windows and doors
  • Attic conversions
  • Driveways
  • Septic tank repair or replacement
  • Central heating system repair or upgrade
  • Supply and fitting of built in wardrobes
  • Conversion of a residential premises into multiple rental units
  • Supply and fit of alarm systems
  • Radon remediation works.

The VAT rate on works carried out must be 13.5%.

Please note - the above is not a complete list. If you are unsure if repair, renovation or improvement works qualify, contact your local Revenue office. You can find contact details for your local Revenue office at Contact Locator.

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1.4.1. What type of works don't qualify?

Carpets, furniture, white goods (such as fridges, dishwashers) and services (such as architect's fees) with a VAT rate of 23% don’t qualify. Materials a Homeowner or Landlord buys such as paint, tiles and so on, don't qualify.

1.5. What type of residential property qualifies?

A qualifying residential property is -

  • A Homeowners main home, which the Homeowner must own and live in or
  • A second hand home, which the Homeowner has bought and will live in as the Homeowner's main home after the works have been carried out (see question 1.5.2. regarding an uninhabitable house).
  • A Landlord’s rental property which must be occupied by a tenant and registered with the Private Residential Tenancies Board
  • A Landlord’s rental property, which will be occupied by a tenant and registered with the Private Residential Tenancies Board within 6 months of the completion of the works.

1.5.1. If works are carried out and paid for on my main home or rental property in 2014 but by the time I claim the tax credit in 2015 it's no longer my main home or rental property, will the works still qualify?

Yes. The works will still qualify and the tax credit can be claimed.

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1.5.2. What type of home doesn't qualify?

The following don't qualify for the HRI -

  • Holiday homes
  • New builds
  • A refurbishment or a reconstruction of an uninhabitable house.

1.6. When do the works have to be carried out?

Qualifying works must be carried out on or after 25 October 2013 and up to 31 December 2016 for Homeowners claiming on their main home and on or after 15 October 2014 and up to 31 December 2016 for Landlords claiming on their rental property. The works can be carried out as one job or on a phased basis.

Qualifying works carried out between 25 October 2013 and 31 December 2013 and paid for by Homeowners during that period will be treated as if they were paid for in 2014 for tax credit purposes.

Qualifying works carried out between 15 October 2014 and 31 December 2014 and paid for by Landlords during that period will be treated as if they were paid for in 2015 for tax credit purposes.

Where planning permission (where required) is in place by 31 December 2016, works carried out up to 31 March 2017 will qualify for relief.

If a Homeowner had works in progress on 25 October 2013, only the portion of the works carried out and paid for on or after 25 October 2013 qualify.

If a Landlord had works in progress on 15 October 2014, only the portion of the works carried out and paid for on or after 15 October 2014 qualify.

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1.7. How much qualifies for the HRI tax credit?

Tax relief can be claimed on all qualifying expenditure, once the Homeowner or Landlord spends over €4,405 (before VAT at 13.5%) per qualifying property. This €4,405 (before VAT) can be the total from any number of jobs on the property carried out and paid for from 25 October 2013 to 31 December 2016 for Homeowners and any number of jobs on the property carried out and paid for from 15 October 2014 to 31 December 2016 for Landlords. While there is no upper limit on expenditure on qualifying works, the tax credit will only be given in relation to a maximum of €30,000 (before VAT at 13.5%) per qualifying property.

If a Landlord is having a rental property converted into multiple rental units, the maximum of €30,000 (before VAT at 13.5%) applies to each of the new rental units.

If a Homeowner or Landlord is having qualifying work done but isn’t spending over €4,405 (before VAT) on the property, it’s still worth choosing a HRI qualifying Contractor and having the work details entered on HRI online. The Homeowner or Landlord may have more qualifying work carried out on the property between now and 31 December 2016. All the spending on the property, added up, could reach the €4,405 (before VAT). It will be very difficult to go back to a Contractor, to try to get him or her to enter details to HRI online, for a job from a year or more ago.

In addition, if a Homeowner or Landlord is using a HRI qualifying Contractor, the Homeowner or Landlord can at least be sure that the Contractor is tax compliant.

1.7.1. How much qualifies if I receive a grant or an insurance payment for the works?

Qualifying expenditure (over €4,405 plus VAT per property) will be reduced by three times the amount of any grant for the works.

For example -

€8,810 plus VAT (at 13.5%) of €1,190 = €10,000 was paid for external wall insulation

€2,700 was received under a Better Energy Home Scheme grantExternal link

The €10,000 will be reduced by €8,100 (€2,700 x 3)

Leaving €1,900 (€10,000 less €8,100) qualifying expenditure

This €1,900 includes VAT of €226

The tax credit can be claimed on the €1,900 less €226 = €1,674 (before VAT).

The tax credit is €1,674 x 13.5% = €225.99.

If the works are the subject of an insurance claim, qualifying expenditure (over €4,405 plus VAT per property) will be reduced by the insurance amount due or received.

For example -

€7,048 plus VAT (at 13.5%) of €952 = €8,000 was paid for repair works and

An insurance payment of €6,000 was received in respect of the repair works

The qualifying expenditure of €8,000 will be reduced by €6,000

Leaving €2,000 (€8,000 less €6,000) qualifying expenditure

This €2,000 includes VAT of €238

The tax credit can be claimed on the €2,000 less €238 = €1,762 (before VAT).

The tax credit is €1,762 x 13.5% = €237.87.

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1.7.2. If the main home or rental property is jointly owned, can each owner claim the maximum tax credit?

No. The maximum tax credit applies to the property but Homeowners or Landlords can opt to split the tax credit between the owners based on qualifying expenditure incurred by each owner.

1.7.3. If qualifying works of €30,000 are carried out on a property and paid for in 2014 and a further €30,000 in 2015, can I claim the tax credit on both?

No. The limit of €30,000 (before VAT) applies to the property for the duration of the Incentive - 25 October 2013 to 31 December 2016 for Homeowners and 15 October 2014 to 31 December 2016 for Landlords.

1.7.4. What happens if I'm waiting for an insurance claim?

For the purposes of calculating the relief, the qualifying expenditure will be reduced by the amount due to be received.

1.7.5. Can I claim if I have received a Local Authority grant?

The same rules apply to any type of grant, qualifying expenditure will be reduced by three times the amount of the grant see question 1.7.).

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1.8. Who can carry out works under the Incentive?

The works can be carried out by one or more Contractors. Each Contractor must qualify for the HRI. (see question 2.2 for information on how you will know your Contractor qualifies).

1.8.1. If I engage multiple Contractors to carry out works on my home or rental property, for example a builder, a plumber and an electrician, either at the same time or over the course of the qualifying HRI period and the total qualifying expenditure exceeds €4,405 before VAT for the property, does this qualify?

Yes. As the qualifying expenditure in total exceeds €4,405 (before VAT at 13.5%) for the property, it qualifies. Each Contractor must qualify for the HRI (see question 2.2 for information on how you will know your Contractor qualifies).

1.9. When is the tax credit payable?

In general, the credit is payable over the two years following the year in which the work is carried out and paid for. Qualifying work which is carried out between 25 October 2013 and 31 December 2013 and which is paid for during that period by Homeowners will be treated as if it was paid for in 2014 for tax credit purposes (so the tax credit is payable in 2015 and 2016).

Qualifying work which is carried out between 15 October 2014 and 31 December 2014 and which is paid for during that period by Landlords will be treated as if it was paid for in 2015 for tax credit purposes (so the tax credit is payable in 2016 and 2017).

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1.9.1 When can the HRI tax credit be claimed?

The tax credit can be claimed in the year after the qualifying work is carried out and paid for. Qualifying work that was carried out and paid for between 25 October 2013 and 31 December 2013 will be treated as if it was paid for in 2014 for tax credit purposes for Homeowners.

Qualifying work that was carried out and paid for between 15 October 2014 and 31 December 2014 will be treated as if it was paid for in 2015 for tax credit purposes for Landlords.

Claims for 2014 can be made by Homeowners through myAccount or ROS from January 2015.

Claims for 2015 can be made by Landlords through myAccount or ROS from January 2016.

The tax credit for 2014 claims by Homeowners will be given in 2015 and 2016.

The tax credit for 2015 claims by Landlords will be given in 2016 and 2017.

1.10. Is there a minimum and maximum tax credit?

This depends on the amount spent on qualifying works as well as any grants or insurance claims due or received during the qualifying HRI period. If there’s no grant or insurance claim, the lowest tax credit amount is €595 per property and the highest tax credit amount is €4,050 per property.

For example:

  1. 1. A Homeowner or Landlord paid a HRI qualifying plasterer €3,000 (before VAT) for plastering work in their home or rental property and also paid a HRI qualifying painter €2,050 (before VAT) for internal and external painting work on their home or rental property
  2. A Homeowner or Landlord paid a HRI qualifying electrician €5,000 (before VAT) for rewiring their home or rental property
    The tax credit is €5,000 x 13.5% = €675
  3. 3. A Homeowner or Landlord paid a HRI qualifying builder €40,000 (before VAT) for an extension on their home or rental property
    The tax credit is €30,000 x 13.5% = €4,050.

1.11 Where can I get further information or assistance?

Information is available in the pdfHome Renovation Incentive (HRI) Guide for Homeowners or Landlords (September 2015 version) (PDF, 445KB) and pdfHome Renovation Incentive Guide for Contractors (September 2015 version) (PDF, 453MB) . The FAQs will be updated on an ongoing basis. If you need further information in the meantime, you can find contact details for your local Revenue office at Contact Locator.

 

October 2015

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