Dáil Éireann Debate, Wednesday - 27 January 2021
206. Deputy Jennifer Carroll MacNeill asked the Minister for Finance the status of the living over the shop scheme; the areas in which it is operating or has previously operated in; the number of pilot schemes there were; if the scheme was successful; and if he will make a statement on the matter. [3941/21]
View answerThe original Living over the Shop (LOTS) scheme was part of a suite of capital allowance schemes which have now terminated and, in relation to this particular scheme, relief is not available for any capital expenditure incurred after 31 July 2008. The incentive was introduced in 2001 in the five city boroughs of Cork, Dublin, Galway, Limerick and Waterford. It provided relief of 100 per cent for eligible expenditure on the refurbishment or conversion of under-utilised space for residential accommodation at a rate of 10 per cent per annum over 10 years, against total income. The incentive closed to new claimants in mid-2006.
The estimated total cost to the Exchequer of the scheme was some €48.7m and an estimated 440 residential units were delivered.
A review of various existing tax incentives was undertaken by my Department, in part internally and in part by Indecon and Goodbody Economic Consultants, and included an examination of the LOTS incentive. The review was published in three volumes in February 2006. Volume two, the Goodbody Review of Area Based Tax Incentive Renewal Schemes is available at the following link:
https://assets.gov.ie/8101/2cfc2bb49fc7481aa2179cdf7712798b.pdf .
On the question about the success of the scheme, the above review found that there was a relatively limited take-up of the scheme for a variety of reasons. Also, having regard to the above figures on numbers and costs, it is hard to see an average tax relief cost of almost €111,000 per unit delivered as good value for money.
Finally, having regard to the well-documented part played by property-based tax incentives in contributing to the financial crisis here, there are no plans for the reintroduction of similar reliefs.
