Minister for Finance Commences Living City Initiative
We have provided below a quick tax synopsis of the Living Citing Initiative.
The Minister for Finance Michael Noonan T.D, accompanied by the Minister for the Environment, Community and Local Government launched the Living City Initiative on the 05th of May 2015. It applies to “special regeneration areas” (SRAs) in the cities of Cork, Dublin, Galway, Kilkenny, Limerick and Waterford. Details of these SRAs are available on the websites of the respective local authorities.
The purpose of the Living City incentive is to create life back into the center of these cities by providing tax relief for qualifying expenditure incurred on the refurbishment or conversion of certain buildings where conditions are satisfied. The scheme applies to expenditure incurred within 5 years from the date the scheme comes into effect, so the final cut-off date is 4 May 2020.
There are two components to the tax relief namely Residential and Commercial.
Tax relief for residential properties
Owners of buildings built prior to 1915 within the Special Regeneration Areas can claim 100% tax relief on their refurbishment over ten years if they make it their private home. In essence, if the person lives in the property for 10 years, he/she is then entitled to a 10% reduction in their taxable income each year for ten years.
Tax relief for commercial properties
Renovations on buildings within the Special Regeneration Areas for retail and commercial use are also entitled to 100% relief over seven years. The benefit applies by way of capital allowances available as to 15% in years 1 to 6 and 10% in year 7 although there is an overall limit of €200,000. These buildings are not restricted to pre-1915.
The City Council for the above areas will provide assistance to those who wish to make an application under the scheme.
The above is a general commentary on the Living City Initiative. The tax implications of specific cases will depend on individual circumstances. If you think the above might be relevant for you, specialist advice should be obtained.
CAG Chartered Accountants has considerable experience in this area and we would be happy to discuss the various issues with you.
