'Renovate your home and get tax breaks'

omahaid

I was reading this

http://www.independent.ie/national-news/budget-2013-renovate-your-home-and-get-tax-breaks-3302993.html

And thinking to myself "this is a great idea" as about half of our estate are doing up their homes at present in lieu of moving home (as we ourselves are). Then I started thinking a bit more, is it more likely that estimates and costs will simply increase by 20% rather than the homeowner benefiting? Or is this a good idea?

tvc15

omahaid wrote: »

I was reading this

http://www.independent.ie/national-news/budget-2013-renovate-your-home-and-get-tax-breaks-3302993.html

And thinking to myself "this is a great idea" as about half of our estate are doing up their homes at present in lieu of moving home (as we ourselves are). Then I started thinking a bit more, is it more likely that estimates and costs will simply increase by 20% rather than the homeowner benefiting? Or is this a good idea?

Well qualifying work would have to be above board and tax compliant which itself would bump up the cost for a lot of people

thebman

Well this part is true I think:

Mr Nolan said it would help former construction workers, who account for one-quarter of those currently on the live register.

But also, a lot of this work is done cash in hand and the person doing it avoids paying tax on the money they earn and the person paying gets a lower price for doing so.

Now the home owner has less incentive to go for that if they can write some of the cost off against tax.

With the surplus of builders unemployed, plenty of competition so the cost shouldn't just increase.

monkeypants

I was thinking that builders would make a grab for the 20% and that increasing the value of your home just as a property tax is introduced would be madness. Although I'm unsure of the logic of a more expensive house costing more; does a more valuable house use more council-provided services?

shedweller

It would be nice if it worked, but as usual, it will be abused. Prospective renovators should get an idea of how much any work would have cost before the tax break system was created or unveiled.

jester77

Or one could be cynical and see this as a means of getting more property tax from people.

bbsrs

Wait for a 20% rebate on your tax or get it done for cash at least 20% cheaper and get an immediate discount without any red tape . I think it will generate very little extra revenue or jobs.

woodoo

I'd say they are trying to get people putting the work through the books. At present i'd say there is an awful lot of cash work going on.

omahaid

omahaid wrote: »

And thinking to myself "this is a great idea" as about half of our estate are doing up their homes at present in lieu of moving home (as we ourselves are).

If you are doing it anyways what is the point of giving a tax break? (other than trying to bring some of the work out of the black economy)

omahaid

Deleted User wrote: »

If you are doing it anyways what is the point of giving a tax break? (other than trying to bring some of the work out of the black economy)

Because I'll do more if there is a tax break

flintash

Thats silly. Just ring 'cash in hand' handyman, let it do it up NAMA's property, and when he takes the cash pull your's taxman badge.
I bet that your's handyman was claiming dole as well. I think its fraud and it is heavily fined. Two in one shot.

thebman

Well if they do it for things like energy efficiency it should lower your bills and carbon emissions which theoretically should lower the countries as a whole and encourage the green economy to develop further.

If your do get a builder in and he/she agrees to do it for cash in hand, can you then claim the tax break or get a reward for reporting them if you have some evidence they did the work?

bbsrs

thebman wrote: »

Well if they do it for things like energy efficiency it should lower your bills and carbon emissions which theoretically should lower the countries as a whole and encourage the green economy to develop further.

If your do get a builder in and he/she agrees to do it for cash in hand, can you then claim the tax break or get a reward for reporting them if you have some evidence they did the work?

Most builders working cash in hand work in their local areas where they are well known working for local people . The chances of them being reported are very slim and although what they are doing is fraud people don't want to be known as snitches, also the people getting the work done are saving money so I'd guess they're financially getting a good deal too and are happy enough.

Uncle Ben

bbsrs wrote: »

Most builders working cash in hand work in their local areas where they are well known working for local people . The chances of them being reported are very slim and although what they are doing is fraud people don't want to be known as snitches, also the people getting the work done are saving money so I'd guess they're financially getting a good deal too and are happy enough.

On Tuesday night the burner blew in my house. Not having any money my only alternative was to ring the local jack of all trades. He came around at 8.30 pm and by 9.15 he was gone having fixed the problem. His bill is €30 and i'll pay him tomorrow. He did a good job, was prompt and he is a lad that can do similar jobs in a multitude of trades.
Derek Nolan's plan maybe worthwhile if a big job is getting done i.e. extensions etc. But if I was to call a registered, compliant plumber out on a Tuesday night and tell him my problem and also that I had no cash at the time I doubt very much if my boiler would be working now.

NIMAN

tvc15 wrote: »

Well qualifying work would have to be above board and tax compliant which itself would bump up the cost for a lot of people

Shouldn't all work be "above board and tax compliant";)

Not advocating black economics are you?

bbsrs

NIMAN wrote: »

Shouldn't all work be "above board and tax compliant";)

Not advocating black economics are you?

Black economics allows people save a little to put towards the property tax .

NIMAN

This is a good idea tbh.

If I could save 20% or more on home improvements I might seriously consider doing a few.

StillWaters

NIMAN wrote: »

This is a good idea tbh.

If I could save 20% or more on home improvements I might seriously consider doing a few.

I think it's a great idea too. It would encourage me to part with some cash to do a few bits around the house. It discourages the sign on and hop in the work van brigade, and it will improve the quality of the housing stock.
It's not just the cost of labour going back into the economy, I'll buy a stove for example from local hardware merchant and associated paraphernalia that I wouldn't otherwise have done.

stephendevlin

StillWaters wrote: »

It discourages the sign on and hop in the work van brigade, and it will improve the quality of the housing stock.

I'd doubt that. Most contractors do plenty of "cash" jobs too and avoid tax.

jimmycrackcorm

bbsrs wrote: »

Wait for a 20% rebate on your tax or get it done for cash at least 20% cheaper and get an immediate discount without any red tape . I think it will generate very little extra revenue or jobs.

I'll be looking to get an extension done in the near future. This would give me a better option to use a registered contractor that would be easier to follow up on the event of issues than a dodgy but cheap builder.

stephendevlin

jimmycrackcorm wrote: »

I'll be looking to get an extension done in the near future. This would give me a better option to use a registered contractor that would be easier to follow up on the event of issues than a dodgy but cheap builder.

Thats one thing I have heard of.. people who got jobs done paying cash and walls etc just falling down after about 2 years. No comeback there

riclad

I think its more common people get painters, plumbers ,carpenters to do nixers for cash.
IF you get an extension ,you need detailed architects plans , planning permission and it must be built exactly
as in the plans ,re size ,shape ,materials used etc
IT will be inspected by the council at some point.

omahaid

Oh well, looks like I'm disappointed

pjuegos

there was nothing about this in the budget, was there?

NIMAN

Seems not, would have been an idea.

Pete_Cavan

Introducing tax breaks for renovating your home would have been pointless anyway due to the system of property tax which has been introduced. It would be difficult to justify carrying out works to improve your house, regardless of any one off saving from a tax incentive, when you may increase your property tax liability for every subsequent year you own the house due to the increase in value of the house. Tax breaks for improving your house would have been one step forward, but the house value based property tax system is two steps back. Not that I think the government knew that their property tax would negate any benefits from the proposed tax break, they just made two bad decisions.

A site value based property tax system would not punish people for improving their house and along with the tax breaks referred to in the op, would allow the improvement of existing housing stock in this country (because, lets face it, there will be very few new houses built for the foreseeable future). This would create jobs for tradesmen, support jobs for those selling the necessary materials, generate VAT on purchasing materials - generally get money flowing in the economy and increase government revenue. Instead, the new system will encourage people to let their houses fall down around them so value decreases, which results in less income for the government and leads to other problems in the future.