Denis Naughten
Ceist:21. Deputy Denis Naughten asked the Minister for Finance his plans to review the home renovation incentive scheme; and if he will make a statement on the matter. [17377/15]
Amharc ar fhreagraThursday, 7 May 2015
Ceisteanna (21)
Freagraí scríofa
As previously outlined to the Deputy in written answers to his parliamentary questions in this matter, the Home Renovation Incentive (HRI) was introduced in Budget 2014 and will run until the end of December this year. 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. In the last Budget I extended the scheme to include rental properties, whose owners are subject to income tax.
The Home Renovation Incentive has been very successful to date with works on just over 19,257 homes notified to the Revenue HRI online system as of 23 April 2015. This represents more than €403 million worth of works involving some 4,869 contractors.
The tax credit is only available to the homeowner and not to children or other individuals who may fund the works. However, the Deputy will be aware that a Housing Adaptation Grant for People with a Disability is available from local authorities. That scheme provides grant aid to applicants to assist in the carrying out of works that are reasonably necessary for the purposes of rendering a house more suitable for the accommodation needs of a person with a disability. The grant can assist with changes and adaptations to a home such as making it wheelchair accessible, extending it to create more space, adding a ground floor bathroom or toilet or installing a stair lift. The grant, which is means tested, can cover up to 95% of the cost of works carried out, which is far more generous than the relief available under the Home Renovation Incentive.
Works which are grant-aided also qualify for the Home Renovation Incentive. Three times the value of the grant is deducted from overall expenditure, with any remainder attracting the tax credit of 13.5%. This is good fiscal practice in that relief is not provided twice for the same expenditure. 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 €4,405, excluding VAT.
As with all tax incentives and reliefs, it will be reviewed in the context of my deliberations for the Budget.