Finance Minister Michael Noonan has recently clarified and updated the parameters surrounding the most recent tax relief concerning home renovations. Mr Noonan proposed the changes when he was in discussions of the Finance Bill with the Oireachtas Finance Committee.
The revised tax relief means that homeowners will be eligible for a lower VAT rate of 13.5 per cent as opposed to the higher rate of 23 per cent if the improvements have begun after October 24th 2013 and have finished by the updated time of March 31st 2016.
Initially understood to be applicable to a one-off renovation costing between Ђ5,675 and Ђ30,000, the threshold is being lowered for homeowners to qualify down to Ђ5,000. In addition to this, Mr Noonan has confirmed that individuals can claim for multiple jobs on their property over the course of the incentive. However, renovations surplus of Ђ30,000 will be subject to the maximum credit of Ђ4,050.
The scheme is designed encourage activity and to increase employment in the construction sector while curbing the popularity of those using contractors working in the black economy. Opposition has pointed out that these types of contractors would rarely charge in excess of the lower Ђ5,000 limit, but Mr. Noonan rebutted the argument clarifying that people can aggregate work done, with the exception of maintenance and repairs, to reach the Ђ5,000 minimum required to avail of the credit relief.