Thursday 25 May 2017

Homeowners splash €1.3bn on upgrading their properties in just over three years

Those who cannot trade up are turning to a tax break to improve their dwellings

Families are resorting to loft conversions and extensions because in many cases they cannot trade up. Stock Image
Families are resorting to loft conversions and extensions because in many cases they cannot trade up. Stock Image
Paul Melia

Paul Melia

Homeowners have spent €1.3bn upgrading their properties in just over three years, with the vast majority located in areas crippled by housing shortages.

Families are resorting to loft conversions and extensions because in many cases they cannot trade up.

Overall, some 41,000 properties of the 55,000 where works were undertaken and tax relief claimed are in the capital and Dublin commuter belt, Cork and Galway.

New figures from the Revenue Commissioners show that almost 7,400 homes have been extended at a cost of €430m since October 2013 when the Home Renovation Incentive (HRI) was introduced.

Another €308m has gone on 'general repairs and renovation', with the remainder spent on window replacement, kitchen upgrades and other works.

Introduced in October 2013, the HRI provides tax relief to homeowners where 13.5pc of the spend is returned by way of an income tax credit over two years.

The minimum investment is €4,405, excluding VAT, and maximum is €30,000. The tax relief ranges from €595 to €4,050, and the scheme will remain in operation until December 2018.

The Revenue Commissioners believes the total value of works completed runs to €1.3bn.

Read more: Paul Melia: Any idea that boosts supply should be given serious consideration

The average value of works completed is €15,980, and some 9,500 contractors are involved.

The amount of tax "lost" to the Exchequer and returned to homeowners is around €55m, but not all credits have been claimed.

"The cumulative total of tax credits available to be claimed by those who have completed qualifying works under the HRI scheme is €91.54m," it said.

"However, this is not reflective of the cost to date to the Exchequer as not all credits have been claimed."

It added that a breakdown of where homes have been extended could not be provided, but the data suggests that the vast majority of works are taking place in areas where demand for homes is highest.

One in 12 of all homes located in Dún Laoghaire Rathdown, and almost 5pc of those in Fingal and South Dublin, have undergone some form of upgrade.

Based on preliminary Census 2016 data on the number of households in each county, the average number of homes upgraded nationally stands at 2.7pc.

The figures also show:

  • Almost 25,000 units of the 55,004 where works were carried out are in Dublin, with €658m spent.
  • Another 7,200 are in Kildare, Meath and Wicklow with a combined spend of €136m.
  • In Cork city and county, 6,424 homes had works completed at a cost of €134.5m. In Galway city and county, just over €47m was spent upgrading 2,253 homes.
  • The highest number of units and overall spend was in Dublin City, where €233m was invested and 8,305 homes updated. This is followed by Dún Laoghaire Rathdown at €218m (6,745 homes), and Fingal at €112m (7,613).
  • The lowest spend was in Leitrim, at €3.11m across 197 units.
  • The highest average spend was in Dún Laoghaire Rathdown at €32,442. The lowest was in Roscommon at €14,384.

Eligible projects range from window replacement to new kitchens and bathrooms, extensions and attic conversions, painting and decorating and septic tank replacement.

Irish Independent

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