There is still a little time left to invest in one of the tax relief schemes due to be wound up next year, writes Barry O'Halloran

The gate will close finally on a range of long-standing tax reliefs at the end of July 2008.

The reliefs have been winding down since the middle of last year, a result of a transitional phase put in place by Minister for Finance Brian Cowen in last year's budget.

But while July still seems relatively far away, for many people finalising their taxes ahead of the end of this month, this could effectively be your last chance to get involved in one of the schemes that are being wound up.

Facing the axe are:

the urban renewal, town renewal and rural renewal schemes;

special reliefs for hotels, holiday cottages, student accommodation and multi-storey car parks;

the general rental refurbishment scheme, and

some developments associated with park-and-ride facilities.

The relief for any money invested in these schemes between now and the end of July comes to 50 per cent and, depending on which one it is, investors have to leave their money in the project for a certain period of time - 10 years in many cases.

If they fail to meet this condition, the tax authorities can claw back some or all of the relief.

The Minister spared nursing homes, childcare facilities and private hospitals, which attract 100 per cent relief. Even so, there is still some demand out there for those that will end in July 2008.

Peter Blessing of CFI, a combined property management and corporate finance business, says taxpayers and their advisers are still coming up with funds for which they are seeking a shelter. However, he adds that they are discriminating about the projects in which they will invest.

CFI has been involved in a range of these projects. Its latest is Athlone Town Centre, which, as its name suggests, is a large-scale retail development. It will be will be anchored by Marks & Spencer.

The investment works by making the capital allowances available against rental income over the investment's life.

Blessing says that queries keep coming from prospective investors.

Even though tax reliefs benefited the economy and the investors and helped to kick-start a building boom in the Republic, they became a political hot potato.

This sparked a Government review, carried out by economic consultants Indecon, which in turn led to the announcement of their winding down by Cowen.

The decision to drop the ones he outlined in the budget speech was largely driven by Indecon's findings that they had outlived their usefulness.

Successive governments introduced tax reliefs to support investment in various areas. The Fianna Fáil/Progessive Democrat coalition was probably their biggest fan, but some incentives were introduced by other administrations as well.

Opposition parties and trade unions became their strongest critics over the last three years, arguing that they were allowing wealthy people to avoid paying their fair share of tax.

Indecon did point out that the people who invested in these schemes were, as a general rule, high-income earners.

One other fact to emerge from the report was that, in some cases, there was a low take-up, either because taxpayers were not aware of the incentives, or because they did not appear to be interested.

For instance, when the consultants looked at the allowance for sports injury clinics, they found that most operators either did not know about it or were unsure of its details.

In contrast, the relief for student accommodation, introduced in 1999, had a strong take-up and resulted in the creation of 15,000 new bed spaces.

"The extent of investment in this sector has transformed the availability of high-quality student accommodation," the report states. "This has occurred at a time of significant improvements in the wider stock of private rented accommodation."

The incentive sparked a €510 million capital spend, with estimated future spending of €936 million. The allowances cost the Exchequer €214 million, but this was offset by indirect gains to the Revenue and general economic benefits totalling €87 million. This left a net "tax foregone" cost of €159 million.

Similarly, the hotels and holiday camps tax break, which led to an upsurge in hotel development, resulted in €664 million being invested in these projects, with, in 2005, estimated future spending of up to €1.3 billion. The net cost to the Exchequer was €125 million.

Indecon acknowledged that this resulted in both an increase in the number of rooms available in the Republic and the large-scale modernisation of existing stock. However, it pointed out that investment had slowed since 2000.

Both these tax breaks are coming to an end. Blessing believes that it is fair to say that most of these tax schemes have served their purpose, but, he says, similar measures should be considered in the future.

"I would say that they should be targeted and appropriate," Blessing says.