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Home Renovation Incentive Tax Credit

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A Bit of a Fixer Upper

We have spoken many times over the years about the ongoing struggle people face in attempting to gain a foothold on the elusive property ladder, but what about those who are already securely on the ladder and seeking to upgrade their home whether the home is their forever home or being rented out to tenants? The good news is there is relief available in the form of a Home Renovation Incentive Tax Credit. Tax Credit is always a welcome term, particularly when it comes to necessary renovations.

The HRI is a form of Income Tax relief for homeowners including landlords and local authority tenants who are paying tax. The relief applies to renovations and approvements including painting, tiling, plastering, electrical work, window replacements, attic conversions, fitted kitchens and more. This relief allows the homeowner to claim a tax credit of 13.5%. New builds do not qualify for this scheme and the home must be either your main home, a home you rent out to tenants, or a local authority home and you must be registered as the homeowner on Revenue’s Local Property Tax Register. If the property is jointly owned, both owners can claim the credit.

To qualify for the tax credit, the homeowner must spend at least €4,405 on either one or a number of projects on the property and can be completed by one or more qualifying contractors. A maximum claim of €30,000 of total cost applies. If the property is divided into multiple rental units, each can be treated individually for the purposes of HRI.

The amount of HRI credit that can be claimed will depend on the amount spent on the renovations and also any grants or compensations claimed. In the event that you have received a grant for the works, the qualifying amount will be reduced by three times the grant amount.

Should you have any queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to assist.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Blowing Up the Housing Bubble

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The housing ladder has remained a hot topic of conversation since the economic downturn and subsequent changing of the rules for applying for a mortgage. The conversation doesn’t seem to be going anywhere as the concern of Ireland falling into the housing bubble trap increases as more and more prospective buyers find themselves unable to pay increasing asking prices.

This week it was reported that these increasing house prices do not look likely to slow down in the coming years. Goodbody Stockbrokers have stated in their latest economic report that the average price of a house is set to continue to rise by up to 10% this year followed by another 8% in 2018 meaning an additional 18% cost increase on houses which have already increased massively in price in the previous three years.

The report states that:

“Mortgage approvals, even excluding cash purchases, are in excess of the amount of new supply expected to come to the market, thus house price inflation is expected to remain strong over the forecast period. […]“While supply remains low, demand appears to be running ahead of expectations”.

Existing housing demand is said to be 30,000 per year, and it is reported that it will take another number of years in order for the number or houses built to match up to tahis demand. This lack of balance between supply and demand is what has encouraged this somewhat bleak forecast from Goodbody Stockbrokers, who have also stated that they expect there will be €13.5billion in new mortgage lending in the coming years.

An additional issue with supply and demand is that there are far more prospective homeowners being approved for mortgages than there are houses available, which continues to push prices higher. A recent infographic shows the increasing prices as they continue to grow. Mortgage approvals are being boosted by the Government’s popular help-to-buy scheme but many of those approved will find themselves without a home to buy.

Should you have any queries on home ownership, or any other financial or business matters, please don’t hesitate to contact us here at EcovisDCA, where we will as always be happy to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY