HOMEOWNERS who want to carry out improvements to their house will get a financial boost in today's Budget, the Irish Independent can reveal.
In a move designed to tackle cowboy builders, Finance Minister Michael Noonan is bringing in a tax break for homeowners hiring reputable contractors.
Homeowners will get the VAT back on completed jobs worth more than €5,000 -- up to a maximum €30,000.
But the rebate will only be granted to people who hire registered builders, charging the full services VAT rate of 13.5pc.
The measure is aimed at getting householders to release their savings into doing up their homes, reviving the construction sector and dealing with the black economy.
It is targeted at homeowners thinking about renovations, conversions and extensions.
On a home renovation costing €20,000, the refund would be worth around €2,700.
The refund would be applicable to the first €30,000 of the work carried out on a larger project.
The VAT will be paid back to the homeowner through their tax returns over the following two years.
"You're not going to be getting an incentive if you're paying cash," a government source said.
The plan is also intended to help registered contractors, rather than those carrying out nixers.
"The lads (doing nixers) are cutting the arse out of it and undercutting legitimate guys because they're not paying tax," a source said.
The plan is regarded as a local economy stimulus as it will help employ local builders, plumbers, electricians and sub-contractors, as well as benefiting local hardware suppliers.
The Coalition is also trying to blacklist construction firms who dodge paying tax, and give preferential treatment to companies with clean records. Boosting the level of activity in the construction sector is regarded as crucial to getting the unemployed back to work.
An economic stimulus package worth €200m, mainly for capital projects, will be outlined today.
The Government is hoping 50,000 jobs will be created next year in the economy.
A new €50,000 grant for the best start-up companies by young entrepreneurs under the age of 25 is on the way.
The amount for the Local Enterprise Office fund will go up from €15m to €18.5m and there will be incentives for domestic companies to take up Research and Development tax credits.
The capital investment levels for business are being maintained again at a high level over the last number of years.
"That means that, in 2014, the investments that Enterprise Ireland, IDA and the County Enterprise Boards can make will create 50,000 jobs in the domestic economy both directly and indirectly in support services and spin-offs," a source said.