Written Answers. - Resort Areas' Tax Relief.
Robert Molloy
Ceist:
42
Mr. Molloy
asked the
Minister for Finance
the representations, if any, he has received regarding the restrictive nature of the concessions extended under the pilot tax relief scheme for certain resort areas; the restrictions referred to in these representations; the consideration, if any, being given to amending the legislation to bring it in line with the concessions granted under the urban renewal tax incentive schemes; and if he will make a statement on the matter.
[4342/96]
As the House is aware, in last year's budget I introduced a new scheme aimed at renewing and updating the tourist-amenities and facilities in certain traditional coastal resorts which have lost out in recent years to the growth in package holidays to sun destinations. Initially eight resorts were selected but during the Finance Bill process a further seven resorts were added to give a better coastal balance to the scheme.
The scheme which will run on a pilot basis in these areas for a three year period has been in operation since 1 July 1995. The incentives available under the scheme are:
—100 per cent accelerated capital allowances, at an initial rate of 75 per cent for owner-occupiers in year 1 with the remaining 25 per cent at 5 per cent per annum for the following 5 years, or in the case of a lessor at a rate of 50 per cent in year 1 and at 5 per cent per annum for the following ten years;
—ten year double rent allowance for traders leasing new or refurbished buildings.
—Section 23 reliefs for the construction or refurbishment of, or the conversion into rented residential accommodation. 100 per cent relief is available against all income.
To-date, I have received numerous requests, in the form of representations and parliamentary questions to extend this scheme. The vast bulk of these have been made on behalf of towns which are not included in the scheme, although in the case of nine of the 15 seaside resorts which have been designated, extensions to the existing designated areas have also been sought. My response to all these requests has been that the scheme which is a pilot nature has only recently commenced and that it would be premature to consider broadening the scope of the scheme at this point.
The Deputy has asked if I would consider bringing this scheme into line with the urban renewal scheme. The present urban renewal scheme will be in operation until 1997 in 35 towns and cities around the country. The incentives available are:
—100 per cent accelerated capital allowances for capital expenditure in the construction or refurbishment of certain industrial buildings in designated areas; initial allowances of 25 per cent (available to both owner occupiers and lessors) and free depreciation of up to 50 per cent owner-occupiers;
—maximum allowance of 50 per cent for commercial buildings; free depreciation for owner occupiers of up to 50 per cent and an initial allowance of up to 25 per cent for lessors with the remainder (up to 50 per cent) at 2 per cent per annum;
—double rent allowance for 10 years for traders leasing new or refurbished business premises. Hotels can only qualify for the double rent allowance if the person entitled to the capital allowance in respected of the building disclaims this allowance;
—owner occupier housing tax allowance of 100 per cent for cent for expenditure on refurbishment of residential premises, available at 10 per cent per annum for ten years;
—section 23 reliefs for the construction or refurbishment of, or the conversion into rented residential accommodation. 100 per cent relief is available against all income;
—ten year rates reliefs is available on a sliding scale.
The reliefs in the seaside resort scheme are more favourable than the comparable reliefs in the urban renewal scheme; 100 per cent capital allowances are available for commercial buildings in the seaside resort scheme as opposed to 50 per cent capital allowances in the urban renewal scheme. An initial allowance of 75 per cent for owner occupiers is available in the seaside resort scheme as opposed to 25 per cent in the urban renewal scheme. Reliefs such as the capital allowances for commerical buildings and the rates relief which exist in the urban renewal scheme are not in my view appropriate to the aims of the seaside resort scheme.
In response to the Deputy I would have to say that I feel that it would not be appropriate to bring the two schemes into line as they are designed for different reasons. Consequently, I have not considered amending the seaside resort scheme to bring it in to line with the urban renewal scheme.
