The Home Renovation Incentive (HRI) is a scheme that enables landlords and homeowners in Ireland to collect tax relief on renovations, repairs and improvement works completed on their rental property or home.
From 1st January 2017, HRI was extended to include local authority tenants with prior written consent from the local authority to carry out works.
HRI is distributed in the arrangement of tax credit on 13.5 percent, set against income tax and spread over two years.
To qualify for HRI the renovation work must have been carried out between:
• 25th October 2013–31st December 2018 for a homeowner
• 15th October 2014–31st December 2018 for a landlord
• 1st January 2017–31st December 2018 for a local authority tenant
To meet HRI requirements, the work must be completed at the homeowner’s primary residence.
Landlords qualify if the work has been finished at a rental property registered on the Residential Tenancies Board. Local Property Tax obligations must also be up-to-date. Income tax must also be paid, whether through self-assessment or PAYE.
Any contractor hired must also be VAT registered and tax compliant in Ireland.
Attic conversions, garages and extensions all fall under the type of renovation tasks that qualify for HRI.
Due to the introduction of the Home Renovation Incentive, total construction activity has risen, providing a much-needed boon for the industry.
Supplying and fitting bathrooms, kitchens, and windows, as well as painting, plastering, plumbing and garden landscaping works also qualify for the scheme. If you’re looking for Dublin windows and doors, enquire with a company such as www.keanewindows.ie/.
However, any work subject to 23 percent VAT, such as architects’ fees, is not covered in the scheme. White goods, carpets or furniture renovations, repairs and improvement works also do not qualify for HRI.
The renovation work must cost a minimum of €5,000 inclusive of VAT at 13.5 percent. This would yield the minimum credit of €595. The work is capped at an upper limit of €30,000 exclusive of VAT, during the HRI-covered period. This would yield the maximum permitted credit of €4,050.
How to apply
HRI tax credit can be claimed at the close of the tax year once your qualifying expenditure reaches the minimum limit of €5,000 and income tax has been paid.