Dáil Éireann Debate, Wednesday - 13 January 2021
205. Deputy Patrick Costello asked the Minister for Finance the amount allocated annually to date to the Dublin City Council living city initiative; and the details of future expansion of funding and the geographic remit within Dublin city as facilitated by departmental funding. [1164/21]
View answerThe Living City Initiative (LCI) was provided for in Finance Act 2013 and commenced on 5th May 2015. In my Budget 2020 speech, I announced that the LCI would be extended from 5 May 2020 to 31 December 2022.
It is a tax incentive aimed at the regeneration of the historic inner cities of Dublin, Cork, Galway, Kilkenny, Limerick and Waterford. The scheme provides income or corporation tax relief for qualifying expenditure incurred in refurbishing/converting qualifying buildings which are located within pre-determined 'Special Regeneration Areas' (SRAs). As a tax expenditure measure, LCI is not a voted expenditure; the incentive is administered by Revenue on a national basis and allocations are not made to local authorities. As such, it is not possible to identify the extent to which tax relief under the scheme may have supported qualifying work within any one local authority area, including the area within the remit of the council mentioned by the Deputy.
There are three types of relief available:
- Owner-occupier residential relief;
- Rented residential relief; and,
- Commercial/Retail relief.
The following table outlines the cost/uptake for all 3 elements combined of the scheme nationally between 2013 and 2018 (the most recent year for which data are available).
|
Year |
No. of claimants |
Max Tax Cost (€M)* |
Amount claimed (€M) |
|
2018 |
27 |
0.2 |
0.5 |
|
2017 |
20 |
0.1 |
0.4 |
|
2016 |
15 |
0.2 |
0.5 |
|
2015 |
13 |
0.2 |
0.5 |
|
2014 |
N/A |
0.1 |
0.2 |
|
2013 |
N/A |
0.05 |
0.1 |
*assumed at 40% for IT and 12.5% for CT
The special regeneration areas for the Living City Initiative were designated following consultation with the relevant city councils and an independent review by a third party advisor. Specific criteria were set down in respect of the areas which should be included within the remit of the LCI which were required to be taken into account by the relevant city councils when putting forward the proposed Special Regeneration Areas for each city. In particular, it was stated that the Special Regeneration Areas should be inner city areas which are largely comprised of dwellings built before 1915, where there is above average unemployment and which demonstrate clear evidence of neglect, dereliction and under-use. It was specified that areas which are generally regarded as affluent, have high occupancy rates and which do not require regeneration should not be included in the Special Regeneration Areas. I have no plans at present to amend the zones.
Officials in my Department reviewed the Living City Initiative in 2016 in consultation with the relevant councils and the then Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs. On foot of that review, a number of changes were brought forward to the scheme in Budget 2017 in order to make the initiative more attractive and effective. The principal change extended the residential element of the scheme to landlords, who are now able to claim the relief by way of accelerated capital allowances for the conversion and refurbishment of property, which was built prior to 1915, where such property is to be used for residential purposes. In addition, the requirement for a pre-1915 building to have been originally constructed for use as a dwelling in order to qualify for the residential element of the Initiative was removed. The floor area restriction for owner-occupiers has also been removed, while the minimum amount of capital expenditure required for eligibility for relief, under all elements of the scheme, was also amended and must now only exceed €5,000.
The aim is to get the design of the Initiative right so that it can work in an effective manner. Once it is clear that this have been achieved, it will then be possible to consider if and how the Initiative might be extended to other locations. Unless the underpinning scheme is made more effective, extension of eligibility for it to other towns is likely to be largely ineffective.
