Dáil Éireann Debate, Tuesday - 26 March 2013
171. Deputy Sandra McLellan asked the Minister for Finance if he has considered the way small to medium traders who rent premises adjacent to or in historic quarters could participate in the Living City Initiative; and if he will make a statement on the matter. [14679/13]
View answer172. Deputy Sandra McLellan asked the Minister for Finance if he has considered that a broadening of the Living City Initiative to include building types other than those specified could enhance and drive the regeneration process in Counties Limerick and Waterford; and if he will make a statement on the matter. [14680/13]
View answerI propose to take Questions Nos. 171 and 172 together.
Finance Bill 2013 includes a section on the Living City Initiative which proposes to introduce a scheme of tax incentives focusing on the regeneration of the historic centres of some of our main cities. The scheme which will be introduced by Ministerial order, will apply in the first instance on a pilot basis to specified regeneration areas in Waterford and Limerick.
My Department has prepared an information note on this incentive 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 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. While I am not suggesting that this scheme is capable on its own of reversing that trend, I am convinced that it has a part to play.
The particular focus of the scheme is as follows: to encourage people back to the centres of Irish cities to live in historical 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 that will apply under this scheme will operate for five years from the date of commencement. However, it is my intention that before it begins, the scheme will be subject to an ex ante cost benefit analysis and, subject to a positive outcome from the analysis, I will seek EU approval under State Aid rules for this initiative to be commenced for Limerick and Waterford cities.
There are two 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. It is not a section 23 provision, which was relief for investors.
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 a residential element upstairs. The allowance is at a rate of 15% per annum for six years and 10% in year seven and is subject to the normal balancing charges of allowances if disposed of within that time period. 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 beforehand before I make any final decision.
I hope these reliefs will help to restore some of these inner city areas to their former glory. The prevalence of Georgian houses is a particular characteristic of the built environment of many Irish cities. 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 I have been exploring ways in which to promote and support the regeneration of these city centres. This pilot scheme is a targeted initiative which is aimed specifically at Georgian areas and I do not intend to go beyond this at this stage.
The reliefs I am introducing are an attempt to encourage people back into the cities to raise their families and if possible to operate their businesses 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 scored 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 them alone for the pilot phase of this initiative.
