I propose to discuss the living city initiative in the Finance Bill, which was initially introduced in concept and in a limited form earlier this year. The initiative was billed as a pilot project for urban regeneration in Limerick and Waterford. It is a targeted pilot tax incentive to encourage people to return to the centre of cities to live in older, historical buildings and to encourage the regeneration of the retail heartland of central business districts. Under the residential part of the initiative, residents can claim tax relief for the costs of refurbishing a house at a rate of 10% per annum for ten years against their income if it is their private residence. This is a significant relief. Retailers will be entitled to relief on works undertaken to upgrade or refit their shops under the accelerated capital allowances scheme over a period of seven years, at a rate of 15% for the first six years and 10% for the final year.
When I spoke on this initiative in February, during the debate on the previous Finance Bill, I pointed out that Waterford, my constituency, would not benefit greatly from the initiative as drafted, and that tweaking would be necessary before the commencement order was signed. The date range for buildings coming within the scope of the legislation was too narrow and the application of a strict definition of what constitutes a Georgian building would have resulted in Waterford city centre gaining little from the initiative. I appreciate that the Minister and his officials heeded the points I made and the necessary changes were recommended and implemented on foot of a cost-benefit analysis of the project. These changes have the potential to assist the process of rejuvenating Waterford city centre.
I am working with Waterford City Council, which is compiling a comprehensive inventory of pre-1915 residences in the city. Now that the measure has been broadened, it is important that the city gains maximum benefit from it. In that regard, I have some further questions and suggestions which could be considered as the initiative is rolled out to other urban areas, including Cork, Dublin and Kilkenny. The ex ante evaluation conducted by Indecon makes for interesting reading, particularly in respect of the different attitudes towards the initiative in different cities. Professional and business people in Waterford are, in some cases, much more sceptical about this tax incentive scheme than their counterparts in Dublin.
The report refers to the merit of small-scale construction refurbishments, in addition to the wider renewal and conservation objectives. It is worth recalling what has been taking place in the area of State-funded conservation and the importance of this initiative as a consequence. The national conservation grant, which funded up to 50% of the cost of repairs and conservation measures for buildings on the record of protected structures, was abolished in 2011. In 2010, €3.74 million was provided under this scheme, which was replaced in 2011 by the Structures at Risk fund, with a total national allocation of only €650,000. These facts accentuate the importance of the living city initiative in conservation terms. The report suggests that Waterford and Limerick would benefit from significant tourist numbers and spending as a result of the scheme. The increase in tourist visitors estimated following research among architects and quantity surveyors suggests a potential increase in tourist numbers of the order of 11.4% in the two cities.
I will now address the nub of the issue, namely, the impact on urban renewal and conservation and the hope that the initiative will result in a reversal in the trend of depopulation of city centres. In the case of Waterford's old city centre, 2,242 buildings, or 25.8% of the total number, are unoccupied. Of this figure, 983 are pre-1919 constructions located in what is regarded as the old city centre. The report estimates that of these 983 buildings, approximately 180 premises will eventually be part of the take-up of the scheme. While this is a conservative and relatively small figure in the context of 2,242 empty buildings, it is still significant. If 180 residences successfully avail of this initiative over the next five years, it will provide a significant boost for tradesmen such as carpenters and plumbers and those operating specialised conservation businesses. Moreover, given that Cork and Kilkenny are to be included in the initiative, it offers significant prospects to tradesmen in the wider region. For example, a tradesman in my home town of Dungarvan will be within one hour from Cork and Kilkenny city centres and 35 or 40 minutes from Waterford city centre. The benefits of the scheme will therefore transfer to tradesmen across the region.
As the report states, refurbishment of old buildings is labour-intensive. Estimates suggest that labour costs will account for 56% of capital expenditure under the initiative. This, the study suggests, would amount to approximately 718 man-years of employment, or 144 jobs for each of the next five years in Waterford and Limerick alone. When one reads through the criteria in place for the scheme one quickly realises, however, that there are a number of barriers to take-up of the initiative, including difficulties in obtaining funds to finance the cost of refurbishment. The authors of the report stress that unless the adjustments they recommend are adopted, the level of take-up will be minimal and the full potential of the initiative will not be achieved. When one deciphers the survey results on likely take-up it becomes clear that the highest level of indifference registered was in Waterford city, where only 28.2% of those surveyed stated there would be a high level of interest in the initiative in the city. In contrast, 61.9% of respondents in Dublin expressed the view that there would be a high level of interest in the capital. I note that Deputy Eoghan Murphy is present.