Simon Harris (Wicklow, Fine Gael)
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I thank Deputy McGrath for his two amendments which, as I understand them, break down as suggestions. The first suggestion is that the residential element of the relief be broadened out to those who are not ordinarily resident in the property and the second is that the application of the relief be broadened out beyond the six cities which the Minister for Finance currently has in mind.
On the first suggestion, I must re-emphasise that the purpose of the living cities initiative is to encourage families to return to live in the centre of these cities. The Deputy's proposed amendment would, in the view of the Minister for Finance, reverse the intention behind the initiative. The suggestion that the relief could be granted to someone who is not the owner or occupier would potentially encourage speculators back into the market. This scheme is not intended to appeal to property investors or speculators. I know that these are not the people which Deputy McGrath has in mind but that could be an unintended consequence of what he proposes. Even those who do not support the initiative would agree that we do not want to arrive at that point.
Lest there is any confusion about this I should point out that the properties in question do not have to be occupied at the time the renovation work is done. As we all know, in many instances they could not be occupied. A derelict building would have to be made habitable before it could be occupied and the relief would only commence when it is occupied as a residence. The relief is limited to owners and occupiers and does not and will not apply to landlords or speculators in the private rented sector. We have seen in the past where difficulties can arise when tax incentives are provided on a wide-ranging basis. When the Minister for Finance announced the living city initiative in the Finance Bill 2013, he stated that it was a scheme with a specific purpose to develop and reinvigorate run-down areas of our city centres. The scheme was to be targeted at houses more or less on a street-by-street basis and was aimed at attracting families back to city centre locations.
The second element of Deputy McGrath’s amendment is that the owner-occupier relief should be extended to all pre-1915 houses in towns with a population of 10,000 or more. Again, the Minister has concerns around implementation of this in practice. For example, if this was to be done, every pre-1915 house in the city of Dublin could avail of the relief and relief would be granted to some of the most affluent areas of our cities and towns. The Minister is concerned that this could result in wastage of tax expenditures in areas which do not need regeneration. This initiative is aimed primarily at urban renewal and regeneration. We have to target the parts of our cities which are in decline and need help. For this reason we are consulting the local authorities to identify the specific areas most in need of help. This is a targeted initiative. We cannot go back to large-scale property reliefs and any future schemes should always be subject to a comprehensive ex antecost-benefit analysis. For these reasons, I cannot accept Deputy McGrath's amendments.