Householders who use registered tradespeople for home maintenance and improvements should be given tax relief in the forthcoming Budget.
This is the view of Labour Galway West TD Derek Nolan who believes such a move would act as a stimulus to create jobs in the construction sector. He added that incentivising people to use compliant tradesmen would also “curb the grip of the shadow economy”.
Under Dep Nolan’s proposal, people could claim tax relief if they use a registered trader to carry out building or maintenance works on their home. The proposal could mirror the current relief scheme for college fees, where an individual can claim tax relief on fees paid for third level courses.
There would be a cap on the amount of relief to be claimed and people would have to prove they have used a trader or builder registered by the Construction Industry Federation or the Irish Homebuilders Association.
A similar scheme was launched in Germany in 2006 and proved successful, reducing the size of the shadow economy by €750 million to €1,250 million and in 2007 by between €2,500 million to €3,800 million.
“The construction industry remains crippled by the property crash,” he said. “This measure, if introduced, would provide a shot in the arm for the sector by creating solid employment opportunities for workers.
“Secondly it would prevent further growth in the black economy, which is costing the country billions in lost revenue each year. Illegal practices in this shadow economy are strangling businesses, putting people out of work, and denying the State vital money to fund services and help the vulnerable.”
Dep Nolan added that as much as one third of the budget deficit could be wiped out if the State recoups the €5 billion in tax lost to the black economy each year.
