Home Renovation Incentive extension a template for the future
Scheme offering 13.5% tax credit on home improvements to go on for another year
Projects involving 36,543 properties have been notified to Revenue’s HRI online system by the middle of last month, representing more than €566 million worth of works and 5,975 contractors
The Government is weighing its options for delivering sufficient growth in the residential construction market, without returning to the era of discredited incentives. As it stands, only a fraction of the new homes required are coming on the market and the shortage is increasingly putting strain on both the private rented sector and on social housing.
Before Budget 2016, however, the Government has already made one low-key concession to the slowly recovering construction industry. With no fanfare whatsoever, a notice published on the Department of Finance website announced that the Government is extending for one year the hugely successful Home Renovation Incentive (HRI).
Homeowners will now be able to claim a 13.5 per cent tax credit on the cost of improvement works on their home or rented investment property incurred up to the end of 2016. The incentive had been scheduled to come to an end this December.
Projects involving 36,543 properties have been notified to Revenue’s HRI online system by the middle of last month, representing more than €566 million worth of works and 5,975 contractors.
The department reckons the incentive is likely to cost it about €38.26 million. It has clearly learned from the mistakes of the past: requiring all projects to be notified to it on a dedicated online site by registered contractors, thus eliminating the vagaries and expense of missing paperwork and the possibility of fuelling the black economy. Indeed, Revenue is hopeful the scheme will encourage some out of the shadows and and back into the legitimate economy.
With the Government balancing the political need for a giveaway budget with an overriding concern not to be seen to return to the discredited policies for which it has happily excoriated the previous government, the success of the Home Renovation Incentive provides it with a template for the future.