Dáil Éireann Debate, Tuesday - 20 November 2018
176. Deputy Noel Grealish asked the Minister for Finance if the home renovation incentive is to be continued in 2019 and beyond as a means of improving housing stock; and if he will make a statement on the matter. [48104/18]
View answerS477B of the Taxes Consolidation Act 1997, the Home Renovation Incentive (HRI), contains a sunset clause for 31 December 2018. I do not propose that the incentive be extended beyond this date.
The incentive was introduced in Budget 2014, at a time when there was considerable loss of employment within the construction sector, with the aim of stimulating increased activity and boosting employment in the sector. The objectives for which the scheme was put in place have been fulfilled, and the support is no longer necessary.
Also, in light of the current housing supply shortage, and the need to deliver 25,000 additional housing units per annum over the period 2017-2021, there is a risk that the Home Renovation Incentive could lead to increased competition for scarce resources within the construction sector, leading to upward pressure on construction costs and house prices. The potential for displacement of labour from work on new builds to work on home renovations would create a high opportunity cost of labour associated with HRI which was not present at the inception of the scheme.
Finally, as the Deputy will appreciate, I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.
