Determined to add an extension? Want to finally get that bathroom refurbished or add more space by converting the bathroom?

When it comes to your house, so many of us have great expectations, a never-ending dream to perfect our place of peace and relaxation. But those dreaded costs are often the death knell for our dreams.

Therefore, any grant or incentive to reduce costs was always going to be welcomed with open arms.

Since the Home Renovation Incentive (HRI) Scheme was introduced in 2013, nearly 77,000 works have been completed across the country as the economy continues to pick up.

What is the HRI?

So, what exactly is the Home Renovation Incentive Scheme? The HRI was introduced to incentivise contractors to register with the Revenue. The benefit for consumers is that by using a certified contractor, you can claim tax relief on works carried out on your house.

The benefit for registered contractors is that they have a better chance of getting business compared to competitors who aren’t registered, because consumers obviously want to employ them and make the tax saving. And the savings to be made are substantial – anywhere between €595 and €4,405 (before VAT at 13.5%), depending on how much you spend upgrading your house.

You must spend a minimum of €5,000 (after VAT) to avail of the scheme, but you can include a number of works in your home to reach that amount.

For example, if you were replacing windows in your home at a cost of €2,200 and were carrying out a small renovation at a cost of €2,800, you can add these two amounts together to reach the €5,000 minimum mark. This would result in a tax credit of €595. The maximum amount you can claim for are works that amount to €30,000 (after VAT), which will result in a tax credit of €4,405.

The scheme was only supposed to last one year but due to its popularity, the deadline continues to be pushed out. Hopefully, it continues to do so because, as time goes on, more and more consumers are reaping the benefits.

Construction Continues

Recent research by the Construction Industry Federation has revealed a staggering 59.6% increase in the construction output this year compared to four years ago.

In 2012, construction output stood at €9.1bn, while in 2016 it rose to €15.2bn. Much of the work carried out falls into the repair, maintenance and improvement (RMI) category.

Nearly 77,000 works have been finalised and finished in the last three years as the economy continues to pick up. Over 9,000 contractors carried out works to a value of €1.2bn. This means the average household spent €15,965 on renovations.

Big Spenders

Looking at the research from the last three years on a county-by-county basis, unsurprisingly Dublin had the highest number of works. In the nation’s capital, 35,448 works were carried out with an average bill of €18,562 – this accounted for 46% of all works carried out.

Cork, the country’s second biggest city and biggest county, was a distant second with 9,261 works.

Interestingly, counties Kildare, Wicklow and Meath had an average of 3,340 works each, which is over double the national average (excluding Dublin) of 1,529. All three of these counties are known to have a large proportion of their working population commuting to Dublin.

Also noteworthy is that the five highest average spending counties were all located in coastal areas (Donegal, Dublin, Clare, Sligo and Wicklow). Counties with a coast spent on average €2,500 more than those that were landlocked.

Leitrim and Monaghan had the lowest number of works with 232 and 271 respectively while Roscommon were the shrewdest spenders averaging €10,429 per work. Perhaps most surprising was Donegal pipped Dublin to the post by €34 as the nation’s biggest spenders, averaging €18,596 per work.

Supporting Communities

Speaking about the scheme, CIF director general, Tom Parlon, said: “The Home Renovation Incentive has been very successful on several fronts.

“It supported an incredible €4bn spend into the Irish economy in 2016. This money is recycled into the local community by the 9,000 plus domestic contractors involved in delivering renovation construction across Ireland.

“These businesses employ a good proportion of the 140,000 people engaged in construction in Ireland.

“The Home Renovation Incentive (HRI) costs about €85m to the Exchequer but supports over €10bn spend in the economy since 2014. Homeowners might otherwise not have spent this money or it may have been spent in the grey market at a great loss to the Exchequer.

“It’s likely that the incentive kept many thousands of construction workers, tradespeople and companies afloat during the recession. The increase in home improvements over the last three years now means that the overall repair, maintenance and improvement (RMI) sector has grown to a quarter of the entire construction industry output and accounts for €1 of every €4 spent in the construction industry.”

Did You Know?

“Sure what would we need a contractor for? I can do the job myself.”

While many of us pride ourselves on being very au fait with DIY, recent research carried out by AA Ireland Home Insurance shows that just under 13% of Irish homeowners have managed to do some sort of damage to their property while attempting DIY.

The survey, which was carried out in April 2017, found that one in eight people admitted that their attempt at DIY had ended in some form of damage, with men proving to be slightly more willing to attempt DIY than women. Of the responses given, nearly 16% of men had damaged their home while attempting DIY, in comparison to just over 9% of women admitting the same.