Ireland’s revenue agency is using an online portal to manage a new property improvement tax relief called the Home Renovation Incentive (HRI). This provision is intended to give value-added tax (VAT) relief, but the HRI is to be managed through an income tax credit amounting to 13.5 percent of relevant expenditure on repairs, renovation, or improvements to a homeowner’s principal private residence. If the taxpayer is to obtain the credit the work must be done by contractors who are up to date with their tax affairs. The tax credit is calculated as the amount of value-added tax on amounts from EUR4,045 (USD6,790) to EUR30,000 (excluding VAT).
The online portal known as ‘HRI online’ will make it possible for contractors to enter details of the work done that qualifies for the credit and the payments made. The homeowner paying for the work will be able to find the details of the qualifying works and payments, check whether the contractor is qualified to do the work, and check that the contractor has complied with the requirements of the tax law.
In addition to providing an incentive to the construction business, this measure therefore also encourages compliance by contractors with the VAT law. Owing to the electronic system the compliance costs for both taxpayers and the tax administration will be reduced.
