Irish homeowners have spent €1.737bn through the Home Renovation Incentive (HRI ) since its launch in 2013.
This incentive has facilitated homeowners throughout the country in carrying out 107,386 home improvement projects during the last four years. These projects have had an average spend of €16,187, providing a huge boost to the Irish economy and employment in the construction sector.
The Home Renovation Incentive (HRI ) provides homeowners with an Income Tax credit at 13.5 per cent of qualifying expenditure on home improvement works carried out on a main home or rental property by contractors. The scheme has proven successful in every county by encouraging investment in the upgrading of private and rental property, fuelled in part by increased awareness about energy efficiency.
The largest amount of work was carried out completing home extensions (34 per cent ), followed by general repair and renovations (25 per cent ) and then window replacement (10 per cent ) and kitchen replacement (10 per cent ). The scheme was introduced initially in late 2013, but its extension to rental properties in late 2014 has also added further activity to this sector.
Construction Industry Federation (CIF ) director general, Tom Parlon says the scheme has contributed greatly to the level of construction activity throughout the country since its introduction.
“These 107,386 projects represent a very strong level of private investment by Irish homeowners, who have availed of the scheme,” he said. “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.”
The national cost to the exchequer of the Home Renovation Incentive (HRI ) to date is €122 million, if the maximum credits that can be claimed by homeowners are availed of. This total cost has yielded an investment of €1.737 billion across 107,386 separate projects.
“The Home Renovation Scheme has been incredibly successful from an economic perspective representing an excess of a 14-fold return on state investment, by private sector investment in the domestic economy,” Mr Parlon continued.
“This private sector investment might not have taken place without the presence of this scheme. 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.”
Mr Parlon says the success of the scheme illustrates the effectiveness of measures such as this for helping Ireland address the target for the construction sector associated with climate change measures.
“The CIF has 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,” he said.