If you have been considering home (or garden) improvements, now would be the perfect time to hop to it, as the value-added tax rate for labour performed in connection with renovation work has been temporarily (until the end of the current calendar year) reduced from 21% to a much kinder 6%.
We would point out that:
- the scheme is confined to homes that are at least two (2) years old,
- the work has to be completed before the current year is out. Advance payments made in connection with work to be performed after 1 January 2015 will not be eligible for the 6% regime,
- the value-added tax rate is to go back up to 21% with effect from 1 January 2015;
- equipment rental and contractor’s call-out charges also come under the 6% regime;
- the reduced tax rate does not extend to include (building) materials.