Writing Off Renovations That Are Subsidised by a Grant - Can I?

A

Always Learning

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Hi,

I think I know how this works, but I'm hoping someone with more experience or expertise here can confirm.
I'm considering some upgrades to an investment property.

Total Cost of Works = €22K
Less Grant rebate = €9K
Net Cost = €13K

Can I write any of this 13K off my taxable income? I'm not sure because I've read that if you get a grant toward your expenses, then you must subtract three times the amount of the grant you got from your qualifying expenses. So as per the example above

Amount Spent on Qualifying Work = €22K
Grant Rebate x 3 = €27K
Qualifying Expenditure for Relief = €0 (or negative €5K)

Can anyone confirm whether I have this correct? I'm hoping I've interrupted it incorrectly and I can write it off!
Also, if I am correct and I can't write off this, are there any parts of the expenses that I can write off? Maybe break down the invoice and some aspects such as repainting can be written off? Or is it just no write off for any of it.

Any info is much appreciated.
 
What is the work?

If it is maintenace then it can be charged against rental income
If it is an upgrade to the structure then is is an enhancement and will reduce any future capital gain
If it is in-between, then it may be allowable for writting off over 8 years, 1/8th of the cost allowed against rental income for 8 years

I don't know anything about grants
 
The work consists mostly of internal and external wall insultation, windows and repairs to gutters and flat roof at the rear.

- 100mm EPS Platinum Wall Insulation, Basecoat/Mesh/Basecoat, Primer Coat & Acrylic Render to all walls at the rear of the properties.
- Supply and Fit up to 72.5mm Insulated plaster boarding with skim coat finish to all front elevation walls, painting by others. New window boards and reinstatement of existing skirting boards.
- Supply and fit insulated plasterboard on slopes in Top Landing and Top Flat
- Ventilation upgrades are required in all windows and 6 No. MEVs (Alternatively we could pipe out the cooker hoods if possible, this will reduce the cost here).
- Supply and Install 100mm Xtratherm Insulation to Rear Flat Roof and New Rubber Membrane, Inc. New Gutters to rear.

jpd said:
I don't know anything about grants
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I believe the fact that I would be getting a grant for it has an effect on the tax side of things.
 
Always Learning said:
But I'm not 100% if this "HRI" thing is actually applicable or not, hence the post.
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It was only applicable up to December 2018, so gone now.

There is a new tax incentive in the latest finance Act, but only applies to properties that already have a tenancy in place.
 
RedOnion said:
It was only applicable up to December 2018, so gone now.

There is a new tax incentive in the latest finance Act, but only applies to properties that already have a tenancy in place.
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My property has a tenancy in place. I actually just spoke with a guy I know who has a lot of knowledge around retrofitting homes, he advises me I would be eligble for a new grant up to €10K which was announced in Nov 22 for landlords who undertake retrofitting works while the tenant remains in situ. The tax deduction is in addition to the SEAI grants.

Essentially, with the SEAI rebate of €9K and €10K back from this scheme, I could get €22K of work done for circa €3K.
That's great news!
 
Always Learning said:
he advises me I would be eligble for a new grant up to €10K
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It's not a grant, but a deduction against your taxable income.
And you claim it the year AFTER the qualifying work is done.

I dint think it's worth 10k, but rather a deduction of 10k before tax. But definitely a positive.

Note, since you're building an empire there, you can only claim it on 2 properties.
 
RedOnion said:
It's not a grant, but a deduction against your taxable income.
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Correct, wrong choice of language from me.

RedOnion said:
And you claim it the year AFTER the qualifying work is done.
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That's fine with me.

RedOnion said:
I dint think it's worth 10k, but rather a deduction of 10k before tax. But definitely a positive.
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Ok, well 10K less that I'm paying a high rate of tax on in addition to the SEAI grant is still a very good outcome. Delighted with that. I'd be mad not to get the work done.

RedOnion said:
Note, since you're building an empire there, you can only claim it on 2 properties.
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Haha, not quite! :D But thanks for the heads up nonetheless. The place in question is the first place I ever bought, I was nearly 7 years ago. At the time I was all about saving every penny and trying to do things myself and I cut corners in order to save. One thing I've learned in the meantime is that it is totally worth it to spend more money on day one and do something right the first time around. This property (a townhouse I split into 3 apartments) has needed work to bring it up to scratch every since. This is the perfect opportunity to do it in a cost effective way.

Gotta hand it to the government on this one, you don't often get something for nothing but this is a very good scheme especially when couple with the SEAI grant.
 
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