As the Deputy is aware, I announced the Home Renovation Incentive in the recent Budget. This scheme came into operation on 25 October 2013 and will run until 31 December 2015. The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence. Qualifying expenditure is expenditure subject to the 13.5% VAT rate. The work must cost a minimum of €5,000 (inclusive of VAT) which would attract a credit of €595. Where the cost of the work exceeds €30,000 (exclusive of 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. Works carried out between 25 October 2013 and 31 December 2013 will be considered to have taken place in 2014 for the purposes of awarding the tax credit.
I do not accept that I am penalising the energy efficiency retrofit sector, as works which are grant-aided by the SEAI under the Better Energy Homes Scheme will also qualify for the incentive. Three times the amount of the grant will be deducted and any additional expenditure will attract the tax credit of 13.5%. This is to align with best fiscal practice in that relief is not provided twice for the same expenditure. The reason that the qualifying expenditure is reduced by three times the grant amount is because the SEAI state that the cash grants under the Better Energy Homes scheme are set values based on 30% of the average cost of energy efficiency works.
It is worth noting that the deduction in respect of grant-aided work is not taken into consideration for the purposes of reaching the minimum spend threshold of €5,000 (including VAT).
The Better Energy Homes scheme is administered by the SEAI and, as such, any queries about the future of the scheme should be directed to the Minister for Communications, Energy and Natural Resources.
