The Home Renovation Incentive (HRI) was introduced by Section 477B of the Taxes Consolidation Act 1997 in 2014. I currently have no plans to re-introduce the scheme which terminated in accordance with its sunset clause on 31 December 2018.
Under my Department's Tax Expenditure Guidelines, the introduction of new tax incentive measures should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention.
The HRI was introduced at a time when there was considerable loss of employment within the construction sector, with the aim of addressing this market failure by stimulating increased activity in the sector. In the current context of a growing economy and construction sector, the initial objectives of the scheme have been fulfilled, and this support is no longer needed in the terms in which it was originally envisaged.
Furthermore, 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 a reintroduction of the HRI 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. As of 2 January 2019, the cost to the Exchequer of the HRI was c. €105 million, with a further €65 million worth of credits yet to be claimed in respect of the incentive. 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, lead to a narrowing of the tax base.
In relation the tax incentive measures for domestic owner-occupiers to renovate their properties, the Living City Initiative (ss.372AAA - 372AAD of the Taxes Consolidation Act, 1997) which applies to buildings constructed before 1915 located in special regeneration areas in the cities of Cork, Dublin, Galway, Kilkenny, Limerick or Waterford; and the Relief for expenditure on significant buildings and gardens (s.482 of the Taxes Consolidation Act, 1997) which applies to buildings which are of significant scientific, historical, architectural or aesthetic interest and to which reasonable access is afforded to the public, both provide such relief.