ROI homeowners have spent €1.2 billion through the Home Renovation Incentive (HRI) since its launch in 2013, but interest in the scheme in 2016 fell significantly. The Help to Buy (HTB) scheme introduced in this year’s Budget has however managed to pick up the slack with better than expected demand for the new tax incentive aimed at first time buyers and self-builders.
In 2016 the total value of works undertaken under the HRI amounted to €327 million (13,550 properties) as compared to €455 million (18,800 properties) in 2015.
Despite this drop, CIF Director General Tom Parlon commented on the scheme’s success since its inception in 2013: “The Home Renovation Incentive has been very successful on several fronts. It supported an incredible €4 billion spend into the Irish economy in 2016. This money is recycled into the local community by the 9,000 plus domestic contractors involved in delivering renovation construction across Ireland. These businesses employ a good proportion of the 140,000 people engaged in construction in Ireland.”
The Home Renovation Incentive (HRI) allows homeowners to claim the 13.5 per cent VAT charged on home improvement work, including extensions.
The CIF says the Home Renovation Incentive (HRI) costs about €85million to the Exchequer, but supports over €10 billion spend in the economy since 2014. “Homeowners might otherwise not have spent this money or it may have been spent in the grey market at a great loss to the Exchequer,” commented the lobbying group.
The CIF added the increase in home improvement over the last three years now means that the overall Repair, Maintenance and Improvement (RMI) sector has grown to a quarter of the entire construction industry output.
Help to Buy oversubscribed
The Help to Buy (HTB) helps first time buyers put down a deposit towards purchasing or building their home through a tax rebate; statistics as of 24 March 2017 show that 12 per cent of HTB scheme applicants to date are self-builders.
To date, 413 claims have been approved, each representing on average €15,250 in tax back. The maximum tax relief available amounts to €20,000.
The HTB’s budget for 2017 was set at just €50 million but with over 2,000 applications already approved and over 2,300 pending approval, the scheme has proved more popular than originally anticipated.
Full sets of statistics from revenue.ie: