A tax incentive scheme announced by Minister for Finance Michael Noonan to encourage the regeneration of historic city centres is being reviewed because of poor take-up.
Mr Noonan launched the Living City initiative in 2013 but it did not come into effect until last year, following clearance by the European Union. The Minister has now confirmed it is to be reviewed because of lack of interest.
The tax incentives apply in certain "special regeneration areas" in the centres of Dublin, Cork, Limerick, Galway, Waterford and Kilkenny, which have been designated by Mr Noonan. The Minister previously said the move would "encourage families to live in the historic buildings in our city centres".
It effectively allows for 100 per cent tax relief, extended over a 10-year period, on refurbishments to homes carried out by owner-occupiers. The qualifying building must have been used as dwelling before 1915, which is an attempt to direct the relief towards the redevelopment of Georgian buildings.
However, figures provided by Mr Noonan to Waterford Fine Gael TD John Deasy by way of reply to a parliamentary question show that only 33 applications have been received, with none in Mr Noonan's home city of Limerick.
The number of applications received for residential development under the scheme is 18 in Dublin; seven in Waterford; four in Cork; two each in Kilkenny and Galway and none in Limerick.
In his response to Mr Deasy, Mr Noonan said that while the scheme had “only been in operation for just over a year” take-up “is lower than anticipated considering up to 100 per cent of relevant expenditure may be tax relieved”.
“My officials are currently reviewing the LCI and considering potential changes to the scheme.”
Commercial properties
The scheme also applies to commercial properties within the designated areas being refurbished or converted into retail premises, although the building does not have to be pre-1915.
The 100 per cent relief applies to a maximum of €200,000 per individual commercial project and is spread over seven years, but commercial applications do not have to be through county councils. As a result, Mr Noonan said figures for commercial applications were not available.
Mr Deasy said it was clear at an early stage the scheme was “too restrictive” but warnings were not heeded.
“It’s a scheme originally intended to incentivise people to renovate Georgian homes in city centres. When it was pointed out that most Georgian homes didn’t qualify because of the square footage restrictions, the bizarre answer from the department was to subdivide these private homes into separate units,” he said.
