Seán owns a house that is located in an SRA. He spends €32,000 refurbishing the house during 2023. Seán leaves the house vacant until January 2024 when he starts to use it as his main residence. He can claim a deduction of €4,800 from his total income each year for six consecutive years, starting in 2024. He can claim a deduction of €3,200 in the seventh year.
Depending on the rate of tax Seán pays, this deduction may result in tax relief of up to €1,920 per year for the first six years (€4,800 @ 40%) and €1,280 (€3,200 @ 40%) in the seventh year. If Seán is unable to claim the deduction in, for example, 2025, he can carry it forward. The deduction carried forward is added to the deduction for 2026. The total deduction for 2026 is now €9,600. Depending on the rate of tax Seán pays, this deduction may result in tax relief of up to €3,840 (€9,600 @ 40%) in 2026.