24th October 2013, Tuesday
By TheCork.ie Politics Reporter
Labour Party TD for Cork South West, Michael McCarthy has welcomed news from the Minister for Finance, Michael Noonan, that the home renovation scheme announced in Budget 2014 will begin this Friday, instead of next year as originally announced.
The tax relief for home renovation and maintenance work, announced in Budget 2014 will give a boost to homeowners and small builders.
This new relief will incentivise homeowners to spend money on their own home by offering them a tax break of 13.5% of the cost of the project. This is not just good news for households, but also for builders and contractors at local level.
The Home Renovation Incentive will provide an income tax credit to homeowners who carry out renovation and improvement works on their principal private residences in 2014 and 2015.
The incentive is payable over the two years following the year in which the work is carried out. The credit will be calculated at a rate of 13.5% on all qualifying expenditure over €5,000 up to a maximum of €30,000.
Qualifying works include extensions and renovations to the home, window-fitting, plumbing, tiling and plastering. This incentive will support fully tax compliant builders and will move activity out of the shadow economy into the legitimate economy as all expenditure and relief claims will have to be registered electronically with the Revenue Commissioners.
The measure will create employment and business for small-scale builders, carpenters, plumbers, and other workers in the construction sector. Crucially, it rewards registered and tax-compliant tradesmen, thereby clamping down on illegal activity in the black economy, and ensuring the Exchequer benefits from legitimate activity.
The announcement in the Budget of a home renovation tax relief for households who use registered tradesmen was an innovative and welcome initiative. This earlier start date will bring more certainty to builders as many people were delaying home renovations until the New Year.