Wouldn’t it be nice if we were reimbursed for a portion of our home renovation projects here in the United States? Imagine what put-off projects you might be tempted into doing. Well, that’s what’s happening in Ireland, where the government has recently put into effect a tax incentive program offering a “13.5% reduction on home renovations.”
Qualifying for the tax break
Almost any Irish home owner qualifies. They simply need to own a home, desire to get some work done on it, pay their property taxes, and meet the minimum renovation cost requirement. This incentive is aimed at primary residences, not rental or investment properties, which don’t qualify. Homeowners must also complete their renovation or have it planned by December 31st, 2015, after which time the incentive program will expire.
Meeting the minimum cost requirement
Money earned under the tax incentive is paid out to the applicant in the two pieces broken up between the two tax years following their completed renovation. The Irish Times explained, “All work which costs between €5,000 and €30,000 is eligible. If you spend more than €30,000, the maximum you will be allowed to claim back is €4,050. So, if you spend €6,000 on a new bathroom for example, you will be able to claim back €810 against your tax.” The nice thing is, the minimum €5,000 doesn’t have to be spent all at once. Irish homeowners have the next 2 years to spend at least that much on a number of smaller projects and they can still qualify.
A surprising number of renovation projects can count towards this credit. These options, according to the Irish Times, include: “Extensions, garages, attic conversions, supply and fitting of kitchens, bathrooms and built in wardrobes, window fitting, plumbing, tiling, rewiring, and plastering.” You can also count any landscaping considered part of the “repair, renovation, and improvement” of the household. However, the incentive doesn’t apply towards carpet or furniture.
Rationale for incentive
The reasoning behind this tax incentive is not, as you might assume, to encourage people to increase the value of their homes or fix structural problems. Actually, Finance Minister Michael Noonan said, “It is designed to stimulate increased activity in the sector and boost employment.”
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