Home renovation scheme will create local construction jobs

Labour Party TD for Galway West, Derek Nolan, has said the new home renovation tax relief scheme will create jobs in the local construction sector.

In Galway alone, thousands of jobs in that sector were lost when the property market collapsed.

“The announcement in the Budget of a home renovation tax relief for households who use registered tradesmen was an innovative and welcome initiative.

“This tax relief will be available for the next two years and will cover home renovations costing between €5,000 and €30,000 and most importantly, incentivises homeowners to only use tax-compliant tradespeople.

“The new tax relief will stimulate jobs in the construction industry in Ireland, giving those in long-term unemployment the opportunity to get back to work. 

“The economic recession in this country – the result of a severely inflated property market – meant that thousands of jobs were lost in the construction sector.

“This initiative seeks to address this problem, making the hiring of registered carpenters, tilers, builders, electricians and plumbers, among others, a more attractive option for householders.

“The measure will help tackle the loss of €5 billion to the black economy each year. Illegal activity in the black economy can cripple legitimate businesses by giving cost advantages to those who avoid tax, don’t pay proper wages or contribute to society.

“This proposal will reduce Ireland’s growing black economy and divert money back into the Exchequer,” said Deputy Nolan.

The scheme runs from January 1 next until the end of December 2015. It provides for a tax credit at 13.5% for homeowners on repair, renovation or improvement work to your home.

In order for you to qualify for this sceme, there are a number of criteria that must be met:

• The work must cost a minimum of €5,000 (ex. VAT), which would attract a credit of €675. Where the cost of the work exceeds €30,000 (ex. 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.

• Qualifying expenditure is expenditure subject to the 13.5% VAT rate.

• The works undertaken commenced on or after January 1, 2014 and finished before December 31, 2015.

• Repair, renovation or improvement work to a principal private residence, which is subject to VAT at 13.5%, is covered. Items such as furniture, white goods and carpets are not covered.

• Any improvements to your home will not affect the valuation of your property for Local Property Tax purposes (the LPT payment will stay the same until 2016, no matter what improvements you make to your property).

• The tax credit is only available to the owner occupier.

• Owner occupiers of a principal private residence who are tax compliant are eligible however, the homeowner’s LPT and Household Charge must be up to date.

• Building Contractors who are tax compliant are eligible to carry out work under the scheme.