Home Economics: Take advantage of Home Renovation Tax
Sinead Ryan has some good news for a home owner who wants to capitalise on the Home Renovation Tax.
Question: I'm getting some new work done to my house and taking advantage of the Home Renovation tax break. Does it have to be building work or can it include buying a new fitted kitchen? I'm also thinking of widening the driveway.
Sinread replies: Good news on both fronts. The Home Renovation Initiative (HRI) runs until 31 December 2015 and gives tax relief on the VAT portion (13.5pc) of a bill for repair, renovation or improvement works carried out by an authorised contractor.
You must spend a minimum of €4,405 before VAT, attracting a credit of €595. The maximum allowable spend is €30,000 (before VAT).
Works that are allowed include painting and decoration, supply and fitting of kitchens, building work, landscaping and driveways, among other items which can be found on the www.revenue.ie site.
Works that do not qualify include furnishings (e.g. carpets and curtains), white goods like fridges and dishwashers and services for say, an interior designer or architect. Any materials you buy directly such as paint, wallpaper etc, are not allowed either.
Fair Deal scheme
Question: Our mum needs to go into a nursing home as she can no longer be cared for at home. Although we want to apply for the Fair Deal scheme, our father still lives at home. Will he be allowed to stay there? We cannot afford the fees without it.
Sinead replies: The Nursing Home Support Scheme (Fair Deal) was introduced in 2009 and provides for all nursing home fees to be paid for a qualifying individual in exchange for 80pc of their weekly income (e.g. pension) and 7.5pc p.a. of their assets (including the family home for a maximum of three years, i.e. there is a 22.5pc cap on a principal private residence).
To qualify, your mother will need to undergo a care needs assessment (which may include a medical examination) to ensure that permanent care is required and a financial needs assessment to look at income and assets, although the scheme itself is not means-tested.
If she meets the criteria, you may choose a nursing home from the approved list of public and private facilities and the arrangements will be made.
In terms of your father, he may stay in his home. The assessment for one member of a couple is based on 50pc of the total income and assets, so, for example, if their combined income is €600 p.w., the assessment on your mother is based on €300 p.w.
The first €72,000 assets/savings of a couple is disregarded in assessment and the principal residence cap will be at 11.25pc over three years (e.g. half the total) where one of the couple remains in the family home. In all cases, the collection of the contribution on assets can be deferred until after one or both parties pass away. The HSE has a great booklet on the scheme which I encourage you to download from hse.ie.
The Ryan Review
One of my big bug-bears is house insurance. It's amazing how complicated companies can make what is quite a straightforward product.
I have a needling suspicion that many renewal documents are deliberately long-winded and ambiguous in the hopes that customers will simply give up reading them and renew their policy without actually finding out if they're overpaying.
In most cases they are, so it is worth taking a little time to see if you can get the price down.
House insurance premiums are on the up, after bad flooding hit the country in recent years. As a pooled system, everybody pays more, not just those affected.
But the silver lining is that house building costs had dropped dramatically since the boom. However, those costs are on the rise again, according to the Society of Chartered Surveyors Ireland (SCSI).
An average three-bed in Dublin costs €169,575 to rebuild; in Cork and Limerick it's €133,570 and €131,385 respectively, and a lot less in rural areas. Price is based on square footage and location and the SCSI has a great guide to costing it (scsi.ie).
Then, work out the cost of actually replacing stuff such as televisions and sofas – even though it will take an hour of your time with a notebook and pen, the cost will be nothing like the lazy 50pc of rebuild costs many insurers assume.
Finally, take photos and get valuations of precious items and have them listed separately if they are valued over the individual item limit on the policy (generally €2,000).
Claiming is a lot easier if you have evidence and receipts.