A lucrative tax break which allows families to claim back over €4,000 on home refurbishments will be extended until the end of 2016 under plans signed off by Finance Minister Michael Noonan, it is being reported. Mr Noonan will today urge homeowners to begin planning for home refurbishment works ahead of next Christmas as part of the latest sweetener due to be unveiled in the Budget.
The announcement of the 12-month extension to the home renovation grant has been fast-tracked so as to encourage interested families to start making arrangements for the works in the coming weeks, the Irish Independent has learned.
The scheme provides for a minimum tax credit to the homeowner of €595, which increases to over €4,000 depending on the scale of the works involved. The type of work covered includes extensions, landscaping, garages, attic conversions, supply and fitting of kitchens, bathrooms and built-in wardrobes, window fitting, plumbing, tiling, rewiring and plastering. But the payback will only be available for homeowners who hire legitimate builders who are registered for tax.
It is understood Mr Noonan will announce details of the grant extension at the Ploughing Championships. “Seeing the success of the measure, and to provide some security to the construction sector, Minister Noonan will be extending the scheme for a further year, until December 31, 2016,” a source said last night. The Home Renovation Scheme provides an income tax credit on the VAT paid to homeowners who carry out work on their homes.
The measure was first announced in Budget 2014 and will expire at the end of 2016, sources have said. John Lowe the Money Doctor stated “The credit is calculated at 13.5pc on spending between €4,405 and €30,000. The maximum level of tax relief is €4,050 and official figures show that the grant has seen a huge take-up since it was first introduced.” The grant has also acted as a much-needed stimulus for the construction industry, Government figures say.
To date, 25,634 properties have been notified to Revenue’s renovation online system as of September 1, 2015. This represents more than €545m worth of works involving some 5,870 contractors. The details of the scheme’s extension come as ministers continue to push for their spending targets to be met ahead of the final budget of this Dáil term.
But Public Expenditure Minister Brendan Howlin yesterday issued a fresh warning to ministers about Budget leaks. A Government spokesman representing the Labour Party side said Mr Howlin was “partly annoyed” that some of the spending targets being mooted by ministers and their department officials are unrealistic.