The Government's move to bring forward the qualification date for the Home Renovation Incentive in the Finance Bill has been welcomed by the Construction Industry Federation (CIF).

The CIF had expressed concerns that the measure was leading to the cancellation of orders and other work, creating cash flow issues.

This issue has been addressed by the Government in the Finance Bill with the commencement date for the scheme now being set for 25 October 2013. So any orders placed between now and the end of 2015 will qualify.

Under the scheme, people who undertake home renovation work will be entitled to a tax rebate at a rate of 13.5%, so long as the work reaches the qualification thresholds. The minimum amount required for the scheme is €5,000 ex VAT. The maximum amount is €30,000 ex VAT.

Relief will be granted by way of tax credit, split over two years, following the year in which the works are carried out.

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The measure was introduced to encourage construction work in households and the scheme will cover the installation of items such as new kitchens and bathrooms by legitimate operators.

However, householders should note that if an individual were to buy a kitchen or bathroom and then separately ask a construction contractor to install the kitchen or bathroom, only the labour element would qualify for the scheme. If the kitchen or bathroom were purchased through the construction contractor as well then the materials would qualify too.

Items such as carpets, furniture and white goods will not qualify. Any work that is already granted aided will also not qualify for the scheme.

Speaking about the change to the commencement date, CIF Director General Tom Parlon said: "This is very positive news and it will be welcomed throughout the industry. There were a lot of our members raising concerns that they were losing orders and that customers were holding off on proceeding with home renovation works until the new year to take advantage of the incentive.

"This would have lead to severe cash flow problems between now and the end of the year for some construction companies which would have been very difficult in the run up to Christmas.

"By amending the commencement date the Government has removed that problem and it should act as an immediate spur to generating construction work for legitimate contractors. The entire point of this measure is to encourage work for legitimate construction operatives and the entire industry is delighted that the Government has offered homeowners such an incentive.

"This measure has been warmly welcomed by the industry as a whole and it shows how the Government can help boost construction activity by working with the industry to bring forward these type of measures."

(CD/JP)