Vol. 560 No. 1
284 Mr. Gogarty asked the Minister for Finance the reason guest houses are excluded from capital allowance write-offs; if it is planned to redress this situation; and if he will make a statement on the matter. [1635/03]
As the Deputy is aware, capital allowances are currently available for the construction or refurbishment of buildings or structures in use for the purposes of the trade of hotel keeping. The existing legislation does not grant any specific entitlement to capital allowances in relation to the construction or refurbishment of guest houses. To grant such an entitlement to guest houses generally would greatly widen the tax relief leading to a significant erosion of the tax base. Also, it may lead to calls to extend the regime to bed and breakfasts and other tourist accommodation facilities.
However, under the current legislation, capital allowances may be available in limited circumstances in relation to the construction or refurbishment of a guest house which is open to all comers, if the number of rooms in the building, the standard of the facilities available and extent of the services provided in the building are similar to those which would be found in a hotel, that is, where the claimant proves that the trade of hotel-keeping is, in fact, being carried on in the building.
As there is currently a need to widen the tax base rather than narrow it, there are no plans to grant any specific entitlement in relation to the construction or refurbishment of guest houses generally in the capital allowances regime.
