Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Schemes along these lines must be cleared in Brussels at Commission level. When the initial proposal was put to the authorities in Brussels, certain difficulties emerged, so there was a rethink and the scheme was extended to the six main cities. The local authorities were charged with designating the areas they considered suitable. An independent outside consultant was retained to give independent adjudication on whether the areas being included were appropriate. All that has been resolved now, and the six local authorities have designated their areas. The Revenue Commissioners have the arrangements in place for the tax relief. It is now up to the private sector to see whether there will be an uptake.

It is very difficult to know, when one conceives of such schemes, whether there will be an uptake. Much depends on the amount of credit in the community and the level of the incentives. In this case the incentives are of two kinds. If, for example, somebody purchases a pre-1915 house in Waterford and pays €100,000 for it, if the person then puts another €100,000 into the refurbishment, he or she can write off €10,000 a year for ten years against income tax. Previously, the write-offs were not against income tax, and the persons concerned had to be owner-occupiers. That will suit some people. For the commercial sector, there are capital allowances for seven years, with a cap of €200,000. It is possible to combine the two. One could refurbish a shop with an apartment overhead that is owner-occupied and avail of the double relief. I hope it works. The scheme is generous. It is in the hands of the local authorities now to drive it, but I understand they are very interested.

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