asked the Minister for Finance if he will give details of tax incentives in place for areas designated under the urban renewal scheme; and if he has under consideration the extending of the tax incentives under the urban renewal scheme to other areas.
Written Answers. - Tax Incentives.
48.
Sections 41-45 of the Finance Act, 1986, as amended, provide for tax reliefs aimed at promoting urban renewal and development in the Custom House Docks Area, certain other designated areas in Dublin and certain designated areas in provincial centres. Under section 27 (1) of the Finance Act, 1987, the designation of individual areas for the purposes of the reliefs is a matter for the Minister for Finance after consultation with the Minister for the Environment.
The reliefs provided for under this legislation are as follows:
(a) Section 42 provides for the extension of the industrial building allowance available under parts XV and XVI of the Income Tax Act, 1967 to buildings or structures (including multi-storey car parks) which are not themselves industrial buildings or structures but which are either used for the purposes of a trade or profession (e.g. shops, offices) or which are let under a bona fide letting arrangement. The full amount of expenditure incurred is eligible for relief in the Custom House Docks Area and in the designated areas in the provincial centres, including Tallaght, but not in the other designated areas in Dublin where the relief is restricted to 50 per cent.
(b) Section 43 applies the provisions of sections 23 and 24** of the Finance Act, 1981 to expenditure incurred wholly within the Custom House Docks Area in Dublin. The qualifying period is the five year period from 25th January, 1988, as appointed by the Minister for Finance, and the expenditure incurred can be set off against all of a lessor's rental income from whatever source.
(c) Section 44 provides relief for an owner-occupier for a ten-year period amounting to 5 per cent per annum of qualifying expenditure in the qualifying period on the construction or refurbishment of a qualifying premises situated wholly within any of the designated areas.
(d) Section 45 provides relief for a ten-year period in the form of a double rent allowance against the profits of the trade or profession to persons carrying on a trade or profession in a designated area who lease either an industrial building or structure in a designated area or an industrial building or structure which qualifies for the industrial buildings allowance under section 42.
The original 1986 legislation provided that the reliefs would only be available in the period 23 October 1985 — 31 May 1989. Section 26 of the Finance Act, 1988, extended the qualifying period for the reliefs to 31 May, 1991, and section 51 of that Act preserved the 100 per cent accelerated capital allowances for the special incentives under the Finance Act, 1986, for the designated areas. However, in the case of the Custom House Docks Area in Dublin, the qualifying period for the reliefs generally is the five year period dating from 25 January 1988. The relief available under section 44 of the Finance Act, 1986, expenditure on owner-occupied residential premises, as amended by section 25 of the Finance Act, 1988, terminates in the Custom House Docks Area, as for all such other areas, on 31 May 1991.
The extension of the above tax incentives to other areas normally arises following consultation with the Minister for the Environment, who is the Minister responsible for designating these areas for the purposes of rates remission under the Urban Renewal Act, 1986.
A further relief in the urban renewal context which I introduced this year is section 4 of the Finance Act, 1989. This section provides for the granting of income tax relief to encourage individuals to come and live in designated areas and renovate houses there that are determined by the Office of Public Works to be historically or architecturally significant. The relief consists of an income tax deduction in respect of 25 per cent of relevant expenditure incurred by an individual in a year of assessment with a further deduction of 5 per cent allowable in each of the following five years i.e. a total deduction of 50 per cent. The expenditure must be in respect of the repair or restoration, or maintenance in the nature of repair or restoration, of a house which is used by the individual as his sole or main residence.
**These tax reliefs, for provision of residential accommodation for renting, are now available countrywide, for relevant expenditure incurred in the period 27 January 1988 to 31 March 1991.