Construction Industry Federation seeks tax rebate as €1.7bn spent on renovations
The CIF said the scheme would be in a similar vein to the Home Renovation Incentive (HRI) which, it said, has generated €1.737bn in spending on 107,386 home improvement projects over the last four years.
The HRI provides homeowners with an income tax credit at 13.5% of qualifying expenditure on home improvement works carried out on a main home or rental property by qualifying contractors.
The CIF said the cost to the exchequer of the scheme to date is €122m, if householders claimed the maximum credits available.
The largest amount of work was carried out completing home extensions (34%), followed by general repair and renovations (25%), window replacement (10%) and kitchen replacement (10%).
Dublin tops the average spending at €18,721 per project, followed by Donegal €17,870 and Clare at €16,682. Unsurprisingly the capital also comes out top in terms of the number of projects carried out since 2013 (49,324), followed by Cork (12,809) and Kildare (6,345).
“The HRI scheme has contributed greatly to the level of construction activity throughout the country since its introduction,” said CIF director general Tom Parlon.
“These 107,386 projects represent a very strong level of private investment by Irish homeowners, who have availed of the scheme. This private investment is good news for construction companies and contractors, which is helping to sustain existing jobs and create new jobs in the industry.”
He said the HRI scheme had been incredibly successful from an economic perspective as it represented an excess of a 14-fold return on state investment, by private sector investment in the domestic economy.
“This private sector investment might not have taken place without the presence of this scheme,” he said.
“There are additional benefits to the exchequer as the scheme ensures projects are being carried out by VAT-compliant, registered contractors. The fact that the majority of these works are designed to make homes more energy efficient is another win for the Government.”
He said the CIF had long argued for a similar model to be used to incentivise companies with large building stock to renovate and improve energy efficiency, allowing them to offset the upfront cost of this through the taxation system in future years.
“Certainly, schemes like the HRI are good value in terms of reducing carbon usage in the built environment, which is an increasing concern given the likelihood of huge fines from the European Union for Ireland’s failure to meet climate change targets of a reduction of 30% in greenhouse gas emissions,” said Mr Parlon..
