Michael Noonan (Limerick City, Fine Gael)
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The Home Renovation Incentive (HRI) came into operation on 25 October 2013 and will run until 31 December 2016.  The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence. This scheme is not a VAT refund. Qualifying expenditure is that which is subject to the 13.5% VAT rate.  The work must cost a minimum of €5,000 (inclusive of VAT) which would attract a credit of €595.  Where the cost of the work exceeds €30,000 (exclusive of VAT) a maximum credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is carried out.  

As the HRI is a tax relief, it is not possible to extend it to individuals who pay no tax. However, unused credits may be carried forward to future years so that if in the future an individual becomes liable to income tax, the credits will be available to them at that stage.

In relation to the proposed refund of VAT, the EU VAT Directive does not specifically provide for the introduction of schemes for VAT refund. While providing a compensation method does not affect VAT being charged according to the Directive, this is not clear cut, as it is generally counter to the provision that VAT should be paid by the final consumer of goods and services. 

It is for this reason that Ireland has not introduced any new VAT refund orders since the 1980s.  The existing refund orders are all historic, going back to the 1970s and 1980s, and any changes to VAT refunds since then have been either by EU requirement or by making minor changes to existing refund orders.

It is worth noting that the SEAI operates the Better Energy Homes Scheme where cash grants are provided for qualifying works. The SEAI also install energy efficiency measures at no cost to qualifying individuals under the Warmer Homes Scheme. Further information on these schemes is available on the SEAI website,