Thursday, 19th
October 2017
info@eastcorkjournal.ie Home Renovation Incentive Scheme
The Home Renovation Incentive (HRI)
scheme
enables homeowners or landlords to claim tax relief on repairs,
reno-
vations or improvement work that is carried out on their main home or rental property by tax-compli- ant contractors and that is subject to 13.5% VAT. With effect from 1 Janu- ary 2017, HRI has been extended to local author- ity tenants who have writ- ten consent from the local authority to carry out the works. The HRI is paid in the
form of a tax credit at 13.5% of qualifying ex- penditure, which can be set against your income tax over 2 years. This ef- fectively reduces the rate of VAT to zero on quali- fying work, up to a value of €30,000. In order to qualify for
the HRI, the work must be done between 25 Octo- ber 2013 and 31 Decem- ber 2018 for homeown- ers; between 15 October 2014 and 31 December 2018 for landlords; and between 1 January 2017 and 31 December 2018 for local authority tenants.
Rules To qualify for the HRI
as an owner-occupier, the work must be carried out on your principal private residence. As noted above, landlords can qualify in respect of work done on their rental properties, which must be registered with the Residential Ten- ancies Board. You must be paying in-
come tax - whether under PAYE or self-assessment - to avail of the HRI. If you are a homeown-
er or a landlord, you must be up to date with your obligations under the Lo- cal Property Tax. If you are a local au-
thority tenant, you must get prior written consent from the local authority to carry out the works. Any contractor you be
use must for Value
Qualifying work The type of work that
qualifies for the HRI is repair, renovation or im- provement work that
is
subject to VAT at 13.5%. This includes extensions, garages and attic con- versions; the supply and fitting of kitchens, bath- rooms and built-in ward- robes; fitting of windows; garden
landscaping;
plumbing, tiling, rewiring, plastering and painting. If you are having your
septic tank repaired or re- placed, or are installing a radon gas mitigation solu- tion, these types of work also qualify for the HRI. Work on driveways and on rainwater harvesting systems can also qualify. There are more
ples of qualifying work on
revenue.ie. If you are un- sure about whether your works will qualify, contact your Revenue office – see ‘Where to apply’ below. Work that is subject to
VAT at 23% (such as ar- chitect’s fees) is not cov- ered. Neither are items such as furniture, white goods or carpets. Homeowners: In gen-
eral, the work must be carried out and paid for between 25 October 2013 and 31 December 2018. Qualifying work between 25 October 2013 and 31 December 2013 is treated as if it was carried out and paid for in 2014. Landlords: In general,
the work must be carried out and paid for between 15 October 2014 and 31 December 2018. Qual- ifying work between 15 October 2014 and 31 De- cember 2014 is treated as if it was carried out and paid for in 2015. Local authority ten-
registered
(VAT) in Ireland and be tax-compliant.
Added Tax Revenue
has published FAQs for contractors. If several contractors, such as a builder, a plumber and an electrician, carry out qualifying work on your home or rental property, you can combine the cost
ants: The work must be carried out and paid for between 1 January 2017 and 31 December 2018. Prior written consent
is
required from the local authority to carry out the works.
Further
information Revenue has published
general information about the HRI and specific in- formation for homeown- ers and landlords, as well
@eastcorkjournal / #eastcorkjournal
of the works to make up the minimum qualifying amount – see ‘Rates’ be- low.
as a guide for homeown- ers and landlords (pdf) and a guide for contrac- tors (pdf). There is also detailed information in Revenue’s Tax and Duty Manual (pdf). Information will be
available shortly on how local authority tenants can claim HRI relief. In the meantime, local au- thority tenants can con- tact their Revenue office for further information.
Rates The
must cost at least €4,405 before VAT at
qualifying work 13.5%,
exam-
which comes to a total of €5,000 with VAT includ- ed. You will only get the tax credit in relation to a maximum of €30,000 (before VAT) during the period covered by the HRI. The minimum credit is €595, based on the mini- mum qualifying expendi- ture of €4,405. The max- imum is €4,050, based on the maximum qualifying expenditure of €30,000. If you are claiming a
grant for the works, or if they are covered by an insurance claim, the amount of your expendi- ture that qualifies for HRI will be reduced.
How to apply Claiming the credit You can claim the HRI
tax credit after the end of the tax year if your qual- ifying expenditure reached the
has minimum
amount of €4,405 before VAT (a total of €5,000) and you have paid income tax. Any unused tax credit can be rolled over into the following year. In
general, the tax
credit is payable over the 2 years following the year in which the work is car- ried out and paid for. If you are on PAYE, your HRI tax credit will be di- vided evenly across your pay dates for each of the 2 years that it is payable. If you are a self-assessed taxpayer, it will be includ- ed in your self-assessment over 2 years, half the tax credit each year. • For homeowners,
2015 was the first year in which you could claim a HRI credit • For landlords, 2016
was the first year in which you could claim a HRI
eastcorkjournal
credit For local authority ten-
ants, 2018 will be the first year in which you can claim a HRI credit – this will be for payments made in 2017. Further infor- mation will be published shortly. In the meantime, you should contact your Revenue office for infor- mation.
Details of the work For you to be able to claim the HRI credit, your
contractor(s) must
enter details of the work on the HRI online ad- ministration system. This system is only accessible to contractors who are registered for VAT and are tax-compliant. Revenue advises appli-
cants to log in to HRI on- line (see ‘Where to apply’ below) to check that their contractors have correct- ly entered details of works and payments.
the
Checklist You should also: • Ensure that you have
paid or arranged to pay any Local Property Tax (LPT) that is due • Check that your con-
tractor has a VAT number and is tax-compliant • Ensure that the work
qualifies – see ‘Qualifying work’ above • If you are a local au-
thority tenant, get written authorisation
from the
local authority before get- ting any work done • Keep all support- ing documentation – tax clearance certificates, esti- mates, receipts etc. • Give the contractor
the LPT Property ID of your property but
not
your LPT PIN or your Personal Public Service Number
Where to apply To claim the
HRI
credit, use the HRI on- line
access through Revenue’s myAccount
system, which you service
or
through the Revenue On- line Service (ROS). If you are a local au-
thority tenant, you should contact your Revenue of- fice for information. If you need to check
whether your work qual- ifies for the HRI, use the Revenue Contact Locator online to locate your Rev- enue office.
Tel: 021 463 8000 • Email:
info@eastcorkjournal.ie • Web:
www.eastcorkjournal.ie
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