Higher stamp duty for homes with poor energy rating among proposals to push retrofits

Latest figures show retrofitting struggling to meet existing modest targets

Caroline O'Doherty

Higher stamp duty on homes with low BER ratings is among measures proposed to try to boost the number of retrofits being carried out.

Free BER (building energy rating) assessments, payroll saving schemes to help employees build up a pot for retrofitting, and refer-a-friend bonus schemes are also on the list.

The measures are proposed by the Sustainable Energy Association of Ireland (SEAI), the state agency that manages the national retrofit programme.

They come as latest figures show retrofitting struggling to meet existing modest targets, with a huge increase in activity needed to cut carbon emissions and comply with climate law.

Successive climate action plans since 2019 have set a goal of retrofitting 500,000 homes to a BER of B2 by 2030. Just 18,527 – less than 4pc – has been achieved.

That leaves on average more than 60,000 to be upgraded to B2 each year to the end of the decade – a massive scaling-up of activity considering just 8,481 were completed last year.

Despite €8bn in funding for the programme to 2030 and homeowner grants running to tens of thousands of euros for insulation, windows, doors, solar panels, heat pumps and other improvements, the take-up of incentives remains low.

Cost is a key barrier identified in the SEAI research, which says more than 70pc of the housing stock in Ireland is at least 40-years-old, meaning the upgrades required are more extensive and expensive.

“The cost of a full retrofit including heat pump can range from €25,000 for a home built since 2000 to €75,000+ for larger or older homes,” it states.

The rapid roll-out of low-cost finance and ‘green loans’ – promised by the Government since 2021 – is urged along with novel savings schemes. A register of homeowners seeking retrofits is also proposed so that people can be clustered in local areas to push contractors for group discounts.

Competitive bidding for deep retrofits to spare homeowners the chore of shopping around for deals is also on the list.

Signage indicating that homes under retrofit are SEAI-assisted and ‘open home’ events to showcase results are among the simpler ideas.

Tax breaks for landlords is one of the more complex ideas, as is a proposal for a higher rate of stamp duty to be applied to the sale of homes with a low BER. A refund would be paid if the property was upgraded within six months.

“This not only provides a strong financial incentive but is also potentially timely since retrofit works are easier when the property is not yet fully lived in and may coincide with other renovation or redecoration works,” the SEAI proposal states.

The rate of duty and BER threshold are not specified, with the SEAI saying the Department of Finance would need to examine such matters.

The more radical ideas would require sign-off by a number of key government departments and will be presented to ministers in the coming days.

Margie McCarthy, SEAI director of research, said the agency was constantly looking at how to improve the retrofit programme and influence public behaviour around retrofitting.  “What we know is we’ve a huge target to achieve by 2030 and we can’t afford to not achieve it. We only need to look at the recent IPCC report to see why,” she said.

“It will be a constant evolution of the retrofit programme between now and 2030 and beyond in terms of delivering on the targets.”

Just over 27,000 homes were upgraded with SEAI support last year, but most were shallow retrofits, with only 8,481 getting the full treatment to reach B2 level.