Home renovation tax break paying off as building activity rises

Labour TD Eamon Maloney has welcomed today’s news that the home renovation tax break introduced in the Budget has driven a recent rise in construction activity in Ireland.

“This is an example of a Budget measure that is already working well for homeowners and builders at local level.

“Confirmation from the latest Ulster Bank Construction Purchasing Managers Index that building activity grew last month at the fastest pace in nine years is hugely encouraging. The Index showed that house-building activity was the single biggest contributor to this growth, with Ulster Bank saying the new tax break in particular drove a jump in the number of home renovation projects.

“The aim of the tax relief is to incentivise homeowners to spend money on their own home by offering them a tax break of 13.5% off the cost of the project. It was also designed to jumpstart activity in the building sector – clearly we can now see this happening with employment being generated for small-scale builders, carpenters, plumbers, and other workers.

“I hope that this positive news encourages more homeowners to avail of this smart and innovative measure, and that it continues to pay dividends for the construction sector, which has recorded its fourth straight month of growth.”

The Society of Chartered Surveyors Ireland has launched a new guide to the Home Renovations Incentive scheme, which shows homeowners how to claim tax relief on the costs of an extension or refurbishment of their home.

The scheme, which allows homeowners to claim tax refunds from a minimum of €600 to a maximum of €4,050, depending on the costs involved, was introduced in Budget 2014 and will run until 31 December 2015.

All work that costs between €5,000 and €30,000 is eligible and the guide includes several case studies and a HRI calculator that estimates the tax refund due.

“This scheme is most welcome but if homeowners want to claim tax relief they need to be aware of the regulations and obligations which apply,” said the chairman of the Building Surveyors Professional Group of the SCSI, Kevin Hollingsworth.

“For example the scheme is only open to fully tax compliant builders as the spending and the relief have to be registered with the Revenue Commissioners. It only applies to a person’s principal private residence and homeowners wishing to avail of it will have to ensure their local property tax and household charge payments are up to date.”

The guide covers the planning, design and budgeting stages as well as hiring a builder. It also outlines the health and safety obligations for the householder as well as the formula that applies to anyone claiming a Sustainable Energy Authority of Ireland grant.

“Many people don’t realise that the refund doesn’t just apply to major projects,” said Hollingsworth. “It can also be claimed for all renovations or building work carried out over the two year period and which costs between €5,000 and €30,000.”

The HRI guide and calculator, which also includes links relating to building standards and health and safety and to Revenue, is available free of charge at www.scsi.ie.