Home Renovation Incentive

Guide for Homeowners or Landlords

December 2014

This Guide updates the April 2014 version

Contents

1. What is the Home Renovation Incentive (HRI)?

2. How does HRI work?

3. What’s ‘qualifying expenditure’?

4. What type of works qualify?

5. What type of works don’t qualify?

6. Whattypeofpropertyqualifies?

7. What type of property doesn’t qualify?

8. When do the works have to be carried out?

9. HowmuchqualifiesfortheHRItaxcredit?

10. How should I choose a Contractor?

11. What should I give to my Contractor?

12. What does my Contractor have to do?

13. How do I know my Contractor is a ‘HRI qualifying’ Contractor?

14. How much is the HRI tax credit?

15. How do I make my claim?

16. How will I receive my tax credit?

Appendix 1 - HRI online Login screen

Appendix 2 - HRI online Look Up Works and Payments screen

Appendix 3 - HRI online tax credit Claim screen

RPC005596_EN_WB_L_1

1. What is the Home Renovation Incentive (HRI)?

The Home Renovation Incentive (HRI) provides tax relief for you by way of an income tax credit at 13.5% of qualifying expenditure on:

• repair,• renovation,or• improvementworks.

Theseworksmust be carried out on your main home or rental propertybyHRIqualifyingContractors.

The amount of your HRI tax credit depends on the amount you spendonqualifyingworks.Youneedtospendover€4,405(beforeVAT)onthepropertytoqualifyfortheHRItaxcredit.This€4,405(beforeVAT)canbethetotalfromanynumberofjobsontheproperty,carriedoutandpaidforfrom25October2013to31December2015forHomeownersandfrom15October2014to31December2015forLandlords.YoucanspendasmuchasyoulikeonthepropertybutyoucanonlyclaimtheHRItaxcreditonamountsupto€30,000(beforeVAT)(seesection9).

Iftherearenograntsorinsuranceclaims,thelowestHRItaxcreditamountis€595perproperty(€4,405at13.5%)andthehighestHRItaxcreditis€4,050perproperty(€30,000at13.5%)(seesection14).

Forexample,ifyoupaid€3,800(beforeVAT)toaHRIqualifyingelectricianforrewiringyourhomeorrentalpropertyand€800(beforeVAT)toaHRIqualifyingpainterforpaintingworkonyourhomeorrentalproperty,yourHRItaxcreditis€4,600x13.5%=€621.

2015willbethefirstyearforHRItaxcreditsforHomeowners.2016willbethefirstyearforLandlords.YourHRItaxcreditwillbeincludedinyourtaxcreditsovertwoyears,startingtheyear

1

aftertheworkiscarriedoutandpaidfor.IfyouareonPAYE,the HRI tax credit will be spread evenly throughout the two years (seesections15and16).

2. How does HRI work?The HRI is intended as a support for Homeowners or Landlords who engage only tax compliant Contractors to carry out qualifying work(seesection4and6).Toachievethisobjective,anumberofcheckshavebeenbuiltin.Youneedtosatisfyyourselfthatyour Contractor is tax compliant and that he or she will tell Revenueonlineabouttheworkandpayments.RevenuealsoneedstobesurethattheworkwasdoneandpaymentsweremadebeforegivingyoutheHRItaxcredit. The scheme operates through Revenue HRI online which you’ll findon www.revenue.ie.Thefollowingarethestepsandchecksinvolved. Beforeworkstarts-

· Tell the Contractor that you will be applying for a tax credit undertheHRIschemefortheworkdone.

· AsktheContractortoconfirmtoyouthatheorsheisparticipating in the scheme and will enter the details of the workonHRIonline.

· GiveyourContractoryourPropertyID(NOTyourPPSNor Local Property Tax PIN as these are important personal information).

• TelltheContractorifit’sarentalproperty.Iftheworkinvolvestheconversionofthepropertytorentalunits,telltheContractorthepostconversionnumberofrentalunits.

· YourContractorwillentertheworkdetailstoHRIonline.· YoushouldlogintoHRIonlinetocheckthatthework

details have been entered (a sample of the HRI online login screenisatAppendix1onpage11).

2

Afterworkstarts- · YourContractorwillenterpaymentdetailstoHRIonline.· YoushouldlogintoHRIonlineagaintocheckthatthe

payment details have been entered (a sample of the HRI onlinelookupscreenisatAppendix2onpage12).

Theyearaftertheworkiscarriedoutandpaidfor- · YoushouldlogintoHRIonlinetoclaimyourHRItaxcredit.

YourLocalPropertyTaxandHouseholdChargemustbeuptodateatthetimeoftheclaim.

Important adviceYouwon’tqualifyfortheHRItaxcreditifyourContractorisnotaHRIqualifyingContractor(seesection13).Youwon’tbe able to claim the HRI tax credit if your Contractor hasn’t enteredtheworksandpaymentsdetailstoHRIonline.

While tax compliant Contractors will have no problem with enteringdetailstoHRIonline,youareincontroloftheprocess.IfyouarebeingfobbedoffandtoldbytheContractorthat he or she will enter the details to HRI online when the jobisdone,youshouldchooseadifferentContractor(seesections10,12and13).

Beforeanyworkstartsandbeforeyoupayoveranymoney,youshouldcheckthattheworkdetailshavebeenenteredtoHRIonlinebytheContractor.

Ifyoudon’tseetheworkdetailsonHRIonline,don’tengagetheContractor.

If you have any doubt that your Contractor will not enter the paymentdetailstoHRIonline,youmaywishtoconsiderholding some portion of the payment until you see the portion paidonHRIonline.ThisisamatterbetweenyourselfandyourContractor.

3

3. What’s ‘qualifying expenditure’?

‘Qualifying expenditure’ means:

you must be paying for

• thetypeofworks (see section 4) • onthetypeofproperty (see section 6)

and you must be paying

• thetypeofContractor(seesection13)

coveredbytheHRI.

For example:Ifyoupaid€500(beforeVAT)toaHRIqualifyingplumberforrepairs to the central heating system in your home or rental property,thisisqualifyingexpenditure.Yourtotalqualifyingexpendituremustbeover€4,405ontheproperty(beforeVAT)toclaimtheHRItaxrelief(seesection9).

4. What type of works qualify?

Examplesofrepair,renovationorimprovementworksthatqualifyunder the Incentive include:

Painting and decorating Plastering

Rewiring Plumbing

Tiling Bathroom upgrades

Fittedkitchens Window replacement

Extensions Attic conversions

Garages Driveways

Landscaping Septictankrepairorreplacement

TheVATrateonworkscarriedoutmustbe13.5%.

4

If you are unsure if your repair, renovation or improvement worksqualify,contactyourlocalRevenueoffice.

5. What type of works don’t qualify?

Carpets,furniture,whitegoods(suchasfridges,dishwashers)andservices(suchasarchitects’fees)withaVATrateof23%don’tqualify.Materialsyoubuyyourselfsuchaspaint,tilesandsoon,willnotbeincludedwhenworkingoutthequalifyingexpenditure.

6. Whattypeofpropertyqualifies?

A qualifying property is:

• yourmainhome,whichyoumustownandlivein,or• asecondhandhome,whichyou have bought and will live in as your main home aftertheworkshavebeen carriedout.• yourrentalpropertywhichmustbe,orwillbewithin6

monthsofthecompletionoftheworks,occupiedbyatenantandregisteredwiththePrivateResidentialTenanciesBoard.

7. What type of property doesn’t qualify?

Youcan’tgettheHRItaxreliefon:

• holidayhomes• newbuilds• arefurbishmentorreconstructionofanuninhabitable

house.

8. When do the works have to be carried out?

Qualifyingworksmustbecarriedoutand paid for on or after 25 October 2013 and up to 31 December 2015 for Homeowners and on or after 15 October 2014 and up to 31 December 2015 for Landlords.Theworkscanbecarriedoutasonejoboronaphasedbasis.Theworkscanbecarriedoutbyoneormore

5

Contractors.Each Contractor must qualify for the HRI and must enterdetailstoHRIonline(seesections11,12and13).

Where planning permission is required and is in place by 31December2015,workscarriedoutandpaidforupto31March2016willqualify.

9. HowmuchqualifiesfortheHRItaxcredit?

Youcanclaimtaxreliefonallqualifyingexpenditure,onceyouspendover€4,405(beforeVAT)ontheproperty.This€4,405(beforeVAT)canbethetotalfromanynumberofjobsonthepropertycarriedoutandpaidforfrom25October2013to31December2015forHomeownersandfrom15October2014to 31December2015forLandlords.Youcanspendasmuchasyoulikeonthepropertybutyoucanonlyclaimthereliefonamountsupto€30,000(beforeVAT).

ImportantIfyouarehavingqualifyingworkdonebutyou’renotspendingover€4,405(beforeVAT)ontheproperty,it’sstillworthchoosingaHRIqualifyingContractorandhavingtheworkdetailsenteredonHRIonline.Youmayhavemorequalifyingworkcarriedoutonthepropertybetweennowand31December2015.Allyourspendingontheproperty,addedup,couldreachthe€4,405(beforeVAT).ItwillbeverydifficulttogobacktoaContractor,totrytogethimorhertoenterdetailstoHRIonline,forajobfromayearormoreago.

Inaddition,ifyouareusingaHRIqualifyingContractor,youcanatleastbesurethatheorsheistaxcompliant.

Ifyouareclaimingagrantfortheworks,forexampleaBetterEnergyHomeSchemewallinsulationgrant,youneedtobeawarethat the qualifying expenditure will be reduced by three times the grantamount.

For example:

Youpaid€10,000forexternalwallinsulation.Youreceiveda€2,700BetterEnergyHomeSchemegrant.The€10,000isreducedby€8,100(€2,700x3).

6

Leavingqualifyingexpenditureof€1,900(€10,000less€8,100).Eventhoughthe€1,900isbelowtheminimumof€4,405,theworksstillqualifyfortheHRIasthetotalamountpaidfortheworkisabovetheminimum.

Iftheworksarethesubjectofaninsuranceclaim,thequalifyingexpenditureisreducedbytheinsuranceamountdueorreceived.

MoreinformationonthisisavailableintheHRIFAQson www.revenue.ie.

10. How should I choose a Contractor?

Whilethedecisionisyours,goodpracticeonengagingaContractorcanbesummarisedasfollows-makesureyoutakesometimewhenselectingaContractortocarryoutthework;lookforwrittenquotesfromseveralContractors;rememberthat the cheapest quote does not necessarily mean the best valueorqualitywork;alsoaskforexamplesofpreviousworkorreferencesfrompreviousclients;askforanagreementinwritingbeforetheContractorbeginsanywork,describingwhattheContractorwilldoandthecosts.YoumayalsowishtocheckiftheContractorisinsured.

It’salsogoodpracticetokeepcopiesofalldocumentsrelatingtothework.

11. What should I give to my Contractor?

Beforeanyworksstart,youshouldgiveyourContractordetailsof your Property ID (which was included on any Local Property Tax (LPT) letters from Revenue) as well as rental property details (seesection2).YourContractorwillneedthePropertyIDtoenteryourworksandpaymentsdetailsonHRIonline.

ImportantDo not giveyourContractoryourPPSNorthePINyoureceived in connection with LPT as these are important personalinformation.

7

12. What does my Contractor have to do?

Beforeanyworksstart,yourContractorshouldenterdetailsonHRIonlineofallqualifyingworksheorsheisabouttocarryoutforyou. Aftertheworkstartsandasyoupayforthework,yourContractorshouldenterdetailsofthepaymentstoHRIonline.YoushouldaskyourContractortoenterthepaymentsassoonaspossible.

13. How do I know my Contractor is a ‘HRI qualifying’ Contractor?

A HRI qualifying Contractor is one who is participating in the HRI.ThismeanstheContractorisregisteredforVATand is tax compliant.

YouwillknowyourContractorisaHRIqualifyingContractorwhenyoucheckHRIonlineandseetheworkdetailstheContractorentered.

Once you see the details on HRI online, you know the Contractorqualifies.

Youdon’tneedtoaskforevidenceofhisorherVATregistration,taxcompliance,TaxClearanceCertificateorRCTRateNotification.IftheContractorisnotaHRIqualifyingContractor,heorshewillnotbeabletoenterthedetailstoHRIonline.

It’s really important tocheckthattheworksdetailsareonHRIonlinebeforeworkstarts.Ifyoudon’tcheckandtheContractor is not a HRI qualifying Contractor you won’t be abletoclaimtheHRItaxcredit.

8

14. How much is the HRI tax credit?

Thisdependsontheamountyouspendonqualifyingworksaswell as any grants or insurance claims you may receive during the HRIperiod(onorafter25October2013andupto 31December2015forHomeownersandonorafter15October2014andupto31December2015forLandlords).

Ifthere’snograntorinsuranceclaim,thelowesttaxcreditamountforapropertyis€595andthehighesttaxcreditamountis€4,050.

For example:

(a)YoupaidaHRIqualifyingplasterer€3,000(beforeVAT)forplasteringworkinyourpropertyandyoupaidaHRIqualifyingpainter€2,050(beforeVAT)forinternalandexternalpaintingworkonyourproperty

YourHRItaxcreditis€5,050x13.5%=€681.75

(b)YoupaidaHRIqualifyingelectrician€5,000(beforeVAT)forrewiring your property

YourHRItaxcreditis€5,000x13.5%=€675

(c)YoupaidaHRIqualifyingbuilder€40,000(beforeVAT)foranextension on your property

YourHRItaxcreditis€30,000x13.5%=€4,050.

15. How do I make my claim?

YoucanclaimyourHRItaxcreditthroughHRIonlinetheyearaftertheworkiscarriedoutandpaidfor.ForLandlords,workscarriedoutandpaidforfrom15October2014to31December2014areclassedas2015.YourLocalPropertyTaxandHouseholdChargemustbeuptodateatthetimeoftheclaim.

9

10

16. How will I receive my tax credit?

YourHRItaxcreditwillbeincludedinyourtaxcreditsovertwoyears.IfyoupayIncomeTaxthroughtheself-assessmentsystem,yourHRItaxcreditwillbedividedevenlybetweenthetwoyears.IfyouareonPAYE,yourHRItaxcreditwillbespreadevenlythroughouteachyear.YourHRItaxcreditis13.5%ofthequalifyingexpenditurebeforeVAT.Itwillbeginintheyearaftertheworkiscarriedoutandpaidfor.

For example:

YouhiredaHRIqualifyingbuildertocarryoutabathroomrenovationonyourhomefor€10,000(beforeVATat13.5%).TheworkwascarriedoutandpaidforinApril2014.YourbuilderenteredthedetailstoHRIonline.

YouhiredaHRIqualifyingpaintertocarryoutpaintingonyourhomefor€2,000(beforeVATat13.5%).TheworkwascarriedoutandpaidforinSeptember2014.YourpainterenteredthedetailstotheHRIonline.

YouclaimyourHRItaxcreditinJanuary2015.

YourHRItaxcreditis€12,000x13.5%=€1,620.

YoureceiveyourHRItaxcreditof€810in2015and€810in2016.

IfyouareonPAYE,yourHRItaxcreditwillbedividedevenlyacrossyourpaydatesforeachyear.

Ifyoudon’tuseallofyourHRItaxcreditinanyyear,itwon’tberefunded to you but the unused amount will be given as a HRI tax creditinthenextandfollowingyears.

Appendix 1 HRI online Login screen

11

English / Gaeilge

ReturntoRevenue.ie

English / Gaeilge

ReturntoRevenue.ie

Home RenovationIncentiveWelcome to Home Renovation Incentive(HRI).If you do not have your Local Property TaxPropertyIDand/orPIN,youcanretrievethese using the linkundertheLoginbutton.

Makesureyouhavethefollowinghandyasyouwillneedthemtocheckthattherecordsyour Contractor has entered are correct andtomakeyourclaim.

Documents containing:• Adescriptionofthework• The estimated start and end date• The estimated cost• The payment date• The payment amount showing the VAT

breakdown• Detailsofanygrant,insuranceorcompensation

amounts.

Login to HRI

Forgotten your Property ID or PIN?

4. Login

3. Enter the Secure PIN*

2. Enter the Unique Property ID*

1. Tax Reference Number*

PAYE

HRISecureLogin

Revenue Home |ROSHelp| Accessibility |SystemRequirements

Appendix 2 HRI online Look Up Works and Payments screen

12

Appendix 3 HRI online tax credit Claim screen

English / Gaeilge

WELCOMEREOTKOPPSN00000009R

1. Getting Started 2. Claims

Claims

Payments Previously Claimed

Payment ID Works ID Claim Date Payment Date Net Payment @ 13.5% VAT @ 13.5% Payment Total

Payments Available for Claim

Select All Payment ID Works ID Payment Date Net Payment @ VAT @ 13.5% Original Total Remainder To Amount Paid By 13.5% Payment Be Claimed You

4071 4109 01/12/2013 €4,540.00 €4,540.004000.00 540 4540.0

2000.00 270 2270.0 4070 4109 01/12/2013 €2,270.00 €2,270.00

Selectthepaymentsforyourclaim,changetheamountpaidbyyouifrequiredandpresscontinue.

*Paymentsmarkedwithanasteriskcannotbeclaimedatthistime.

Total Spend @ 13.5%: €6,000 | Total VAT @ 13.5%: €810.00 | Total Claimed: €0.00 | Total Selected: €0.00

Back Continue

Revenue Home |ROSHelp| Accessibility |SystemRequirements

13

Issued by the Revenue Commissioners December 2014

Further Information

YoucanfindfurtherinformationontheHRIincludingFAQsandexamples,aswellasvideos,onourwebsiteatwww.revenue.ie oryoucanphoneyourRevenueLoCallservice,whosenumberislistedbelow.

u Border Midlands West Region 1890 777 425 Cavan,Donegal,Galway,Leitrim,Longford, Louth,Mayo,Monaghan,Offaly, Roscommon,Sligo,Westmeathu Dublin Region 1890 333 425 Dublin (City and County)u East & South East Region 1890 444 425 Carlow,Kildare,Kilkenny,Laois, Meath,Tipperary,Waterford, Wexford,Wicklowu South West Region 1890 222 425 Clare,Cork,Kerry,Limerick

Pleasenotethatrateschargedfortheuseof1890(LoCall)numbersmayvaryamongdifferentserviceproviders.

IfyouarecallingfromoutsidetheRepublicofIreland,please phone+35317023011.

Time Limit for Repayment Claims: A claim for repayment of tax must be made within four years after the end of the tax year to whichtheclaimrelates.

Accessibility: If you are a person with a disability and require thisleafletinanalternativeformattheRevenueAccessOfficercan be contacted at accessofficer@revenue.ie

Thisleafletisintendedtodescribethesubjectingeneralterms.Assuch,itdoesnotattempttocovereveryissuewhichmayariseinrelationtothesubject.Itdoesnotpurporttobealegalinterpretationofthestatutoryprovisionsandconsequently,responsibilitycannotbeacceptedforanyliabilityincurredorlosssufferedasaresultofrelyingonanymatterpublishedherein.