Home Renovation Incentive (HRI) Scheme - Update



Getting ready for HRI - Checklist for Contractors

Finance (No 2) Act 2013 provides for a Home Renovation Incentive (HRI) scheme, which will run from 25 October 2013 to 31 December 2015. The Incentive provides for tax relief for Homeowners 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 by qualifying Contractors.

Qualifying expenditure is expenditure subject to the 13.5% VAT rate.

The works must cost a minimum of €4,405 (before VAT), which will attract a credit of €595. Where the cost of the works exceeds €30,000 (before VAT), a maximum credit of €4,050 will apply.

The credit is payable over the two years following the year in which the work is carried out and paid for. 2015 will be the first year for HRI tax credits.

The works must be carried out on or after 25 October 2013 and up to 31 December 2015. Homeowners must be Local Property Tax and Household Charge compliant in order to qualify under the Incentive while Contractors must be VAT registered and tax compliant in order to qualify to carry out works under the HRI.

While systems have yet to be developed, the Incentive will be administered through Revenue's online systems. All works, payments and claims will be registered electronically with Revenue.

Transitional arrangements, around ensuring the Contractor qualifies, are outlined in the pdfHome Renovation Incentive (HRI) scheme Guide for Homeowners (PDF, 374KB) as well as in the relevant FAQs below. The transitional arrangements will operate in advance of the electronic HRI system.

Home Renovation Incentive (HRI) scheme Guide for Homeowners

This Guide is relevant to qualifying works carried out and paid for before April 2014. It sets out what Homeowners should do to avail of the HRI up to early April 2014. After this, Revenue will introduce an electronic HRI system. Further information on the electronic HRI system will issue closer to the system 'go live' date.

The FAQs, which will be updated on an ongoing basis, are organised into 5 sections -

  1. General Information on the Home Renovation Incentive (HRI) scheme
  2. Information for Homeowners on HRI
  3. Information for Contractors on HRI
  4. What Homeowners and Contractors should do for works carried out and paid for before April 2014 - the transitional arrangements
  5. What Homeowners and Contractors will do from April 2014 - The Electronic HRI system

If you would like further information on any of the above please contact one of our tax consultants and we will be happy to help.

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