Homeowners spent billions on their homes in 2016
Irish homeowners have availed of €1.2 billion in total through the Home Renovation Incentive (HRI) since its launch in 2013. This incentive has facilitated homeowners in carrying out nearly 77,000 home improvement projects over the last three years with an average spend of €16,000 per project. The extension of the HRI to rental properties in late 2014 has also added further activity to this sector.
The Home Renovation Incentive (HRI) provides homeowners with an Income Tax credit at 13.5% of qualifying expenditure on home improvement works carried out on a main home or rental property by qualifying Contractors.
According to the CIF, the Home Renovation Incentive has been very successful on several fronts. It supported an incredible €4 billion 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 €85 million to the Exchequer, but supports over €10 billion 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 improvement 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.
The CIF also says this incentive also helps Ireland achieve its onerous climate change targets as many people use the incentive to make their homes more energy efficient. This of course has also helped support the growth in demand for energy efficient products.
This demonstrates how effective incentives like can be in reaching climate change targets. The CIF believes that a similar model could be utilised to incentivise companies with large building stock to renovate and improve energy efficiency, possibly offsetting the cost through the taxation system over a number of years. This would, says the CIF, be a huge step towards achieving our climate change targets of a reduction of 30% reduction in green-house gasses. This would also help us avoid huge fines from the EU.
The CIF is also encouraging the Government to put the Construction Industry Register of Ireland (CIRI) on a statutory footing. Only construction companies operating at the highest standards will be registered and this will help consumers select quality operators for any renovation or new building. The CIRI register is the equivalent to those quality standard schemes in operation in the engineering and quantity surveyors sections of the industry.
The Home Renovation Incentive has been extended until 31 December 2018.
