Making The Most Of The Home Renovation Initiative
The Home Renovation Initiative (HRI), announced in Budget 2013 will end this year unless extended in the budget. With an election on the way, it is difficult not to see some form of the current incentive being re-configured in another format. But it in the event it may not and you are considering changing or re-modelling your existing dwelling then it would be good to plan now and avail of the scheme benefits.
Anyone undertaking work on their home can avail of a tax credit of 13.5% on expenditure of between €5,000 and €30,000. This applies to extensions and renovations to the home, window-fitting, plumbing, tiling and plastering. Over €4,050 of tax credits are available for a €30,000 spend the most allowed under the scheme. The minimum is €675 on a spend of €5,000 (excluding VAT) x 13.5%), the minimum allowed.
The Scheme applies to works carried out after October 25 2013 up to December 31 2015. Where planning permission (if required) is in place by 31/12/2015, work paid for up to 31 March 2016will qualify. All Property Tax must be paid in order to qualify under the Scheme — you will be required to give your LPT property ID number to the builder — and your builder must have his tax affairs in order to carry out the works. There are a number of other requirements the builder must satisfy. The incentive is managed by the Revenue Commissioners and full details are on their website www.revenue.ie.
Living City Initiative
The Living City Initiative is a scheme of property tax incentives which applies in certain ‘special regeneration areas’ in the centres of Dublin, Cork, Limerick, Galway, Waterford and Kilkenny. The scheme provides for tax relief for qualifying expenditure incurred on both residential and certain commercial refurbishment and conversion work that is carried out during the qualifying period (5 years from the day this provision was commenced by Order of the Minister for Finance).
The residential element provides tax relief for owner- occupiers by way of a deduction from their total income of 10% per annum of qualifying expenditure over a 10 year period and is only available where the property is the claimant’s only or main residence.The commercial element provides for tax relief over a 7 year period by way of an accelerated capital allowance of 15% of qualifying expenditure for each of 6 years and 10% in year 7.
This element of the relief applies only to the refurbishment or conversion of premises for the provision of retail and other services within the State. The maximum level of actual tax relief which can be obtained in respect of any individual project is capped at €200,000, in accordance with EU State Aid rules. More information is available on the revenue website.
The Better Energy Homes scheme run by the Sustainable Energy Authority of Ireland (SEAI), provides grants for roof insulation, wall insulation, boiler and heating control upgrades and solar panels. To avail of the grant, your house must be built before 2006, you must have the grant approved before work commences and the work must be carried out by one of the authority’s registered contractors. Note that a grant will reduce the level of your tax relief under the Home Renovation Initiative.
Check out the SEAI website for further details of the various reliefs available for installing energy saving measures in your home.
Have a Plan
Sit down and prioritise the work that you need to carry out. Ask yourself what is the most pressing need of the you and/or family? Does the roof need to be re-done and the garden or are you looking for additional space. Do the floors need changing/upgrading? Likewise the bathroom. Approach it like a military exercise – put all requirements down on paper. Then order them according to what is the most urgent task and the most manageable both logistically and economically.
Talk to the Pros
Yeah you’ve probably heard all the shows on the telly say get an architect, an engineer, a quantity surveyor, a guy to make the tea…etc. In reality this is not feasible for most people taking on small projects with limited budgets.
But do seek advice from the pros if you can source friends, family or acquaintances and ask for their input. The do actually save you time and money on big projects as it is what they do and believe it or not they do know what can and can’t be done for how much.
“The more professionals you employ to assist you, the better,” says quantity surveyor Patricia Power. “It saves you money in the long run and you know where you stand. The advantage of a quantity surveyor is that they will keep your bills on budget from day one. If you’re stuck on one aspect they will advise you on where you can save elsewhere.”
The latest regulations on construction require a registered architect, building surveyor or chartered engineer to act as a registered certifier for construction work that extends to more than 40sq m.
Put the plan into action
The input of an architect is important and not as expensive as it was. Many will gladly come and visit and draw up plans for a reasonable fee (circa 150 or less). They will also give you a more concrete picture of what your costs will eventually be so you can gauge what is required before you begin. It is important to put time and thought into this stage and if drawing a design that it is functional and aesthetic. Also consider the impact if you intend to sell the property in the future at some stage.
An extension of more than 40sq m will require planning permission. Most work under is exempt but check before beginning work. Going ahead with the work without the correct planning permission can have severe consequences and probably cause difficulties when it comes to selling your house. No harm to check with local planning office in you county council area to be doubly sure.
Getting the money
There has been a major change of mood by most banks recently who are keen to loan money for all kinds of property transactions. Shop around for the best options. Some credit unions are also rumoured to be ready to lend for home improvement projects also. Don’t forget that tax relief for the work is available (see above).
When choosing your building professional to carry out the work – like your first plan – do your homework and talk to as many people about potential builders/tradespeople before you make your decision. A builder who is genuinely interested in getting the work, will ask questions, visit your home and provide a programme of work for the project.
Make sure you include all detailed work to be carried out so that the right price can ascertained. The cheapest may not mean the best qualified to carry out the work. The Construction Industry Federation have an extensive online database of registered and compliant builders that you can find and search called the Construction Industry Register Ireland.
Choosing the right professional
Make sure your architect, surveyor or engineer is chartered or registered with their professional body. This will ensure they have the right qualifications, undertake continuous professional development and are up to speed with regulations. The most important professional to get right is the architect. Talk to three or four, talk to their previous clients, and make sure you like the work they have done before.
Whether your architect or someone else manages the project, the interpersonal relationship is vital. Trust your instinct on whether you will work well together. Take your partner or a friend along for a second opinion. Make sure they have professional indemnity insurance and have the capacity to take on your project with their current workload. Don’t use fees as your only criteria. The cheapest won’t necessarily give you what you want.
Under the building standard regulations (amendments), which came into force on March 1st and apply to any construction project of more than 40sq m, an assigned certifier must carry out inspections at the beginning, during and at the end of the project to certify that everything is on track and to issue certificates of commencement and compliance.
Homeowners will need to sign the commencement certificate, appoint a certified builder, appoint a certified professional and notify the building control authority of any changes. Certified professionals can include architects, building surveyors and civil engineers.
Always ensure that all the professionals you engage have the appropriate cover before undertaking the work. Even people carrying out projects themselves would be well advised to get insurance cover. For larger projects that go on over an extended period of time may involve preparing a safety file and informing the Health & Safety Authority.