Year End Tax Tips – Part 2!

Year End Tax Tips – Part 2!

1.Home Renovation Incentive – [HRI]

This incentive applies equally to qualifying works done on your own home or a buy to let property before 31 December 2018. . Basically it is possible to claim back the vat element of certain renovation works up to a maximum spend of €30,000 excluding Vat per property. The minimum spend is €4,405 excluding Vat at 13.5% per property. The maximum amount claimable is theVat inclusive price of €34,050 so that vat element of €4,050 can be claimed back over a 2 year period following the year in which the works were carried out and paid for. For example Mrs C paid €40,000 including Vat for an extension onto her home in 2016, then it is possible to claim back the Vat element of €4,050 over the 2 year period 2017 and 2018 with €2,025 to be claimed in each tax year. The qualifying works are those that attract the 13.5% vat rate and include;

  • Painting and decorating
  • Plastering
  • Rewiring
  • Plumbing
  • Tiling
  • Bathroom upgrades
  • Fitted kitchens
  • Window replacement
  • Extensions
  • Attic conversions
  • Garages
  • Driveways
  • Landscaping

The key to ensuring that you qualify for the HRI credit is that you engage a HRI qualifying contractor.That means the contractor must be registered for Vat and is tax compliant. Before commencing any works and before you make any payments you need to ensure that your contractor has entered the details of the works that they are going to do for you on-line on the HRI system. You will need to give the contractor your property id which can be got from your local property tax return but do not give your PPS number or PIN number that relates to your LPT return. You will know that the contractor is a qualifying HRI contractor when you see the details on the HRI system. Any HRI qualifying contractor will have no problem with this. Once you start making payments to the HRI qualifying contractor then you need to ensure that the contractor is entering the payment details on-line on the HRI system. Otherwise you will not be able to claim the credit.

You can claim your HRI tax credit through HRI online the year after the work is carried out and paid for. Your HRI tax credit will be included in your tax credits over 2 years. If you are a PAYE taxpayer your credit is divided equally through your tax credit certificate in the 2 year period and if you pay Income Tax through self-assessment your tax credit will be also divided equally and claimed on your tax return over the 2 year period. To claim, your local property tax and household charge must be up to date. If you are currently engaging a HRI contractor who is carrying out qualifying works on your home or rented property any payments made before 31 December 2016 will ensure you get the tax credits back in 2017 and in 2018. If the payments are delayed until next year then the credit reclaim will be delayed until 2018 and 2019.

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