16 Feb 2017
Free Government money? Yes, we thought that would get your attention!
Many homeowners who thought that their 2006 home purchase would have been swapped for something with at least two more bedrooms and a bigger kitchen by now are thinking about renovating instead.
And thanks to the Government, the option to renovate isn't as unattainable as they might have thought. Read on to find out the 5 things you need to know about the home renovation grant plus some tips for successful renovations.
What is the home renovation grant?
The Home Renovation Incentive (HRI) Scheme is running from 25th October 2013 to 31st December 2015. It allows up to €4,050 in tax relief for Local Property Tax and Household Charge compliant homeowners. Renovation must be carried out and completed within this time period to qualify.
The relief is by way of an Income Tax credit at 13.5% of qualifying expenditure on repair, renovation or improvement works carried out by qualifying contractors. These contractors must be VAT and RCT registered and tax compliant in order to qualify to carry out works under the Scheme.
The credit is payable over the two years following the year in which the renovation work is carried out and paid for. Therefore the first year for HRI tax credits will be 2015. Revenue HRI online administers the incentive, and all works, payments and claims must be entered to HRI online.
What types of work qualify for the home renovation incentive scheme?
Examples of repair, renovation or improvement works that qualify
under the Incentive include:
Plastering, painting and decorating, plumbing, tiling, bathroom or kitchen cabinetry upgrades, window replacements, attic conversions, extensions, garages, attic conversions, driveways, landscaping, septic tank repair or replacement. The VAT rate on work carried out must be at 13.5%.
What types of work will not qualify for the Home Renovation Incentive Scheme?
Furniture, carpets, white goods (appliances such as fridges and dishwashers) and services (like an architect's fee) with a VAT rate of 23% don't qualify.
How do I know if I'll qualify?
Your home will qualify if it is your main residence that own or live in. You can also get an incentive for a second hand home that you have bought and intend to make your main home once the renovations have been carried out.
The works carried out must cost a minimum of €4,405 before VAT, which will attract a credit of €595. In cases where the renovation work exceeds €30,000 before VAT, a maximum credit of €4,050 will apply.
Tips for a successful renovation
When carrying out renovations, it's always wise to keep one eye on what will increase the resale value of your home, if you ever do decide to put the house on the market.
• Unless absolutely necessary, never sacrifice a bedroom for an
extra bathroom. Aim for each bedroom to be suitable for a double bed,
with space for two bedside tables and enough storage for two
• Invest in long-term fittings like windows, flooring, bathrooms and fitted kitchens. After that, the decor can be updated relatively inexpensively as more of a DIY project.
• Being as eco-friendly as possible will pay off in the long-run. Aim to meet the EU Energy Efficiency Directive.
• By all means, personalise your new space. Just do it in an inexpensive, adaptable and removable a way as possible. Consider the priorities of potential buyers- they're not going to care about the expensive tank you had built for your fish collection.
Thinking of renovation your home?
Celebrity architect Dermot Bannon has some great renovation tips and
explains what you can get for a budget of €50,000. If you thinking of
moving home or buying a fixer upper book your
30 minute mortgage meeting now to start the ball rolling.
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