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Living City Initiative

Dáil Éireann Debate, Wednesday - 20 March 2013

Wednesday, 20 March 2013

Questions (231, 232, 233, 234, 235)

Sandra McLellan

Question:

231. Deputy Sandra McLellan asked the Minister for Finance if he will consider extending the living city initiative pilot project to the walled town network and-or the walled towns historical initiative; and if he will make a statement on the matter. [13125/13]

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Sandra McLellan

Question:

232. Deputy Sandra McLellan asked the Minister for Finance if he will broaden the remit of the living city initiative to include a broader range of houses with the specific aim of maximising the regeneration process and ensuring that it is more community based; and if he will make a statement on the matter. [13126/13]

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Sandra McLellan

Question:

233. Deputy Sandra McLellan asked the Minister for Finance if he will explain the link between the selection of Limerick and Waterford due to their extremely low ranking on the Relative Deprivation Index for Irish Cities, –6.66 and -4.51 respectively, for inclusion in the pilot project for urban regeneration under the living city initiative and the refurbishment of owner occupied Georgian homes; the rationale for selecting this particular scheme; the way he expects it to address the related issues of chronic unemployment and high levels of deprivation; and if he will make a statement on the matter. [13128/13]

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Sandra McLellan

Question:

234. Deputy Sandra McLellan asked the Minister for Finance if he will extend tax breaks under the living city initiative to small retailers who rent premises adjacent to historic buildings and quarters; and if he will make a statement on the matter. [13135/13]

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Sandra McLellan

Question:

235. Deputy Sandra McLellan asked the Minister for Finance if he will outline in detail the way tax breaks for the refurbishment of owner-occupied Georgian houses as outlined in the living city initiative will assist the regeneration process in Limerick and Waterford; and if he will make a statement on the matter. [13127/13]

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Written answers

I propose to take Questions Nos. 231 to 235, inclusive, together.

Section 30 of the Finance Bill 2013 introduces a scheme of tax incentives, focussing on the regeneration of the historic centres of some of our main cities. The scheme, which will be introduced by Ministerial order, is entitled the Living City Initiative and will apply, in the first instance, on a pilot basis, to specified regeneration areas in Waterford and Limerick. My Department have prepared an information note on this Initiative which was published on the Department’s website on 13 February last.

The historic centres of some of our cities have suffered for a long time from gradual depopulation and the relocation of family homes and businesses out to the suburbs, particularly during the period of the “Celtic Tiger”. These centres have also suffered greatly from the general economic downturn of the past few years and while I am not suggesting that this scheme is capable, on its own, of reversing that trend, I am convinced it has a part to play especially with regard to helping to rebuild confidence in those areas. The particular focus of the scheme is as follows:

- to encourage people back to the centres of Irish cities to live in historic buildings, in particular Georgian houses, and

- to encourage the regeneration of the retail heartland of central city business districts.

I indicated in my Budget speech in December last year that I would examine proposals for a targeted incentive for already identified regeneration areas. The tax relief which will apply under this scheme will operate for 5 years from the date of commencement. However, it is my intention that before it begins, the scheme will be the subject to an ex-ante cost benefit analysis. Subject to a positive outcome from that analysis, I will seek EU approval under State Aid rules for this initiative to be commenced for Limerick and Waterford cities. I have not yet decided on the exact boundaries of the regeneration areas in these cities but I will be consulting with my Government colleagues and the relevant local authorities before I make any final decision.

There are 2 strands to the scheme. The first involves a tax relief for the refurbishment or conversion of Georgian houses for residential purposes. The relief will only apply to owner/occupiers and not for rented residential accommodation. The relief will be spread over 10 years at the rate of 10% of the expenditure per annum, provided the property is occupied as the principal private residence of the individual during that time. No relief can be transferred to any subsequent purchaser. It will be necessary for the individual to have received confirmation from the relevant local authority that the property conforms to planning permission (if required), appropriate building regulations and floor area limits and that the cost of the works seem reasonable, before the relief can be claimed.

The second strand is a scheme of accelerated industrial buildings allowances for the conversion and refurbishment of retail premises, although other business services will also be allowed where the premises is a Georgian building. In such cases, the commercial element will be confined to the ground floor or basement with the residential element upstairs. The allowance is at the rate of 15% per annum for 6 years with 10% in year 7 and is subject to the normal balancing charges or allowances if disposed of within that time period. The standard restrictions on the sideways setting of unused capital allowances against other income will apply and there will be no exemption from the current treatment of the termination of the carry-forward of certain unused capital allowances for passive investors. Furthermore, the high earners restriction, which applies across the full range of reliefs such as this, also applies to this relief.

I am hopeful that these reliefs will help restore some of these inner city areas to their former glory. The prevalence of Georgian houses is a peculiar characteristic of the built-environment of many Irish cities and while some of these Georgian buildings have fallen into a state of disrepair and dereliction, my colleague, the Minister for Arts, Heritage and the Gaeltacht and myself have been exploring ways in which to promote and support the regeneration of these city centres. If EU State Aid approval is received, I will then consider extending the scope of the Initiative to other clearly defined areas within cities, but I do not believe that it would be prudent to go beyond the areas which are already identified at this stage.

The reliefs which I am introducing are an attempt to encourage people back into these cities, to rear their families and if possible, to operate their business from there. It will not be possible to revitalise these inner city areas without this happening. Pobal, the state agency that supports local communities has developed a sophisticated index which measures deprivation in different local areas across Ireland. Taking into account the deprivation statistics from the 2011 Census, both Limerick and Waterford score as the most disadvantaged of our major cities. Furthermore, unemployment rates in these cities are also the highest, significantly worse than the national average. Both have their own unique problems regarding unemployment and social problems and for these reasons I have selected these for the pilot phase of this initiative.

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