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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

NEW FUNDING FOR IRISH CONSTRUCTION SECTOR

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A recent report has suggested that Sankaty, a well-known leading global credit specialist is now looking towards lending in Ireland. It was reported that Sankaty has been planning to raise up to $1 billion for a lending fund intending to target businesses that have found it difficult to gain funding in the wake of the recession – in particular, those in the construction sector.

 

Sankaty have teamed up with Irish financier Dermot Desmond to back a new venture called Broadhaven Credit Investments, which was officially set up on June 24th 2014. The venture is being fronted by Stewart Doyle and David Cullen and is backed by Sankaty London team.

 

Broadhaven has earmarked €200million to support house construction in Ireland, one of the sectors of Irish business which has been hit hardest by the financial crisis. The hope is that this extra funding may reduce the risk of another housing bubble, and by extension the consumer may see a reduction in the skyrocketing house prices. Broadhaven is prepared to support credible house builders in Ireland. Despite having its primary focus be on the construction sector, Broadhaven also intends to widen its gaze to the wider lending world by extending its funds to some Irish SMEs.

 

It is believed that while the initial seed capital for Broadhaven is estimated at €200million, there will be additional opportunities for this seed capital to grow exponentially over time. Sankaty has told potential investors in its new fund that the middle market presents an opportunity to earn “attractive risk-adjusted returns with significant premiums to the liquid credit markets. Structural changes in the global banking sector continue to constrain traditional lenders, leaving a supply and demand imbalance for middle-market financing.”

 

Since the company’s inception, Sankaty has invested over $7.5 billion in middle market investments and brings a debt-oriented approach to funding, and the move to the construction sector is an interesting one for such a huge company. Similarly, the move into this sector for such a well-known financier as Dermot Desmond may suggest that the long-suffering housing market in Ireland may indeed be about to pick up.

 

The funds being raised for this venture will have a six-year lifespan and offer funds over a three-year period. These funds may be an attractive prospect for you and your business. Should you require any assistance on how to manage your funds or repayments we here at DCA Accountants are here to offer you advice and assistance.