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Home Renovation Incentive - two thirds rule

  • 28-03-2014 8:06am
    #1
    jellybeans81
    Registered Users, Registered Users 2 Posts: 8 ✭


    We're in the process of costing up an extension to our home but there are elements of the extension that won't fall under the main contractor package. For example, the stove and kitchen improvements where the materials will cost more than 2/3rds of the overall ex VAT cost. I believe in this instance the 2/3rds rule will apply 23% to the entire invoice so it wouldn't be allowed under the home renovation scheme. Can anyone confirm this? Is it possible, if this is not allowed, to apply for tax credits on the labour/13.5% VAT element only?


Comments

  • #2
    DOCARCH
    Moderators, Home & Garden Moderators, Science, Health & Environment Moderators Posts: 18,445 Mod ✭✭✭✭DOCARCH


    The HRI Scheme is not a 'VAT back' scheme, it is (somewhat) a coincidence that you get a 13.5% credit on expenditure, but, it is not related to VAT (whether you pay 13.5% or 23% VAT on certain items).


  • #3
    jellybeans81
    Registered Users, Registered Users 2 Posts: 8 ✭jellybeans81


    Thanks! That's really good to know. So the contractor doing the work must quality and the work itself as opposed to the rate of VAT on the work. So there's a chance the stove and kitchen improvements might all quality...are stove retailers who supply and fit are considered qualifying? Assuming the work comes under "central heating repair or upgrade"?


  • #4
    martinn123
    Registered Users, Registered Users 2 Posts: 2,300 ✭✭✭martinn123


    DOCARCH wrote: »
    The HRI Scheme is not a 'VAT back' scheme, it is (somewhat) a coincidence that you get a 13.5% credit on expenditure, but, it is not related to VAT (whether you pay 13.5% or 23% VAT on certain items).

    With respect, that is not quite correct.

    Works carried out by a Contractor, or Contractors, who charge 13.5% as it is a supply and Fit Contract, ( hence VAT at 13.5% ) will qualify

    White goods will not qualify, as they are sold ''Supply Only'' at 23% VAT

    So the Stove, if it is Supply and Fit and is charged at 13.5% will qualify.

    There are other criteria, such as the property tax being up to date.

    http://www.revenue.ie/en/tax/it/reliefs/hri/hri-homeowner-faqs.html


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