Choosing a stove is a big decision! You can spend anything from a few hundred to a couple of thousand on a stove, so it’s not surprising we find people asking if they can offset the cost by claiming tax relief.
The good news is that you may be able to claim tax relief on a stove as part of the Home Renovation Incentive (HRI) Scheme.
So, what is the Home Renovation Incentive Scheme?
The Home Renovation Incentive was introduced in 2014 as a scheme to provide tax relief for homeowners and landlords in the form of a tax credit at 13.5% on qualifying repairs, renovations and improvement works on a main home or rental property. So, if the work you are undertaking qualifies, you can include the cost of supplying and fitting your wood-burning stove in this.
To qualify, you must be paying income tax under PAYE or self-assessment.
The works must be performed by qualified contractors and the total expenditure must be over €4,405 (before VAT at 13.5%) up to a maximum of €30,000 (before VAT) per property.
This tax credit is applicable to works carried out and paid for from:
If you are the owner of a home, you may be able to claim for any qualifying work that was carried out and paid for from 25 October 2013.
If you are a landlord, this date is from 15 October 2014.
If you are a local authority tenant then you can claim for any work undertaken and paid for from 1 January 2017.
You will not be able to claim for any work carried out OR paid for after 31 December 2018.
However, there is an exception to this closing date - if planning permission was agreed and in place by 31 December 2018. If this is relevant to you, then any relevant work that was undertaken between 1 January 2019 and 31 March 2019 will be applicable for the relief.
Who can claim tax back on the incentive?
Owners of a main home or landlords of rental properties who pay income tax under PAYE or self-assessment are eligible. You must be on Revenue’s Local Property Tax Register as an owner or joint owner of the main home or rental property. If you’re a landlord, you should be registered with the Private Residential Tenancies Board (PRRTB).
You can also get relief on a home you haven’t yet moved into but intend on moving into once the work is complete.
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When can the tax credit be claimed?
The tax credit can be claimed in the year after the work is carried out.
The credit is payable over the two years following the year in which the work was carried out.
How is the tax credit paid out?
If you are on PAYE, your HRI tax credit will be divided evenly across your pay dates for each year.
If you don’t use all of your HRI tax credit in any year, it won’t be refunded to you but the unused amount will be given as a HRI tax credit in the next and following years.
How to claim?
Firstly, you should ensure the contractor you hire has a VAT number and is tax compliant. Details of the project must be entered onto HRI online by the contractor so you need to give them the LPT Property ID of your property. Your Property ID will appear on any Local Property Tax letters from Revenue.
Once your contractor enters this information on HRI online, accessible through Revenue’s online system, you should login and review the details to ensure everything is in order. Only compliant contractors will be able to access the system.
Revenue specifically advises homeowners to ensure details of the work have been entered onto the system before it even starts and goes as far as to advise that “if you don’t see the work details on HRI online, don’t engage’’.
Work covered under the scheme includes:
Work that doesn’t qualify includes carpet fittings, furniture, white goods and services such as architect’s fees with a VAT rate of 23%.
Holiday homes, new builds and refurbishment of an uninhabitable house don’t qualify.
Can work still qualify for the scheme if I get a grant?
Yes but not the full amount. The qualifying expenditure will be reduced by three times the amount of the grant.
So for example:
You pay €10,000 on upgrading insulation and receive €2,700 under the Better Energy Homes Scheme.
So, the €10,000 will be reduced by €2,700X3 or €8,100.
€10,000 less €8100 leaves €1,900.
The €1900 has a VAT of €226
Under the scheme, you can claim a tax credit on €1900 less the €226
The tax credit is: €1,674X13.5%=€225.99
We have a dedicated tax return service for landlords
1. Ask your contractor to confirm if they are participating in the scheme
2. Give your contractor your Property ID (not your PPSN or Local Property Tax Pin)
3. Once your contractor enters the project onto HRI online, login and check that all is in order-do this BEFORE any work starts
4. The VAT rate on qualifying works must be 13.5%
5. Even if the work doesn’t total the minimum spend of €4,405 before VAT, it’s still worth hiring a HRI contractor and entering the details online as all of your spending could add up!
6. Ask family and friends for advice on good contractors
7. Ask for references from the contractor
8. Ask to see examples of previous work
9. Get a detailed breakdown of costs
10. If it’s a big job, it may be worth hiring a project manager or architect to oversee the work and ensure it’s all in order.
If you're still confused about Irish taxes you can email us at firstname.lastname@example.org or for more on PAYE taxes, you can download our simple guide here.
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