Neale Richmond (Dublin Rathdown, Fine Gael) | Oireachtas source

I thank Deputy Nash for raising this issue with me this evening. I love Drogheda too. My mother went to school there. She was in the Drogheda Grammar School for many a year, although it was many years ago. It is a small city that I visit regularly. I appreciate Deputy Nash's passion, which is shared by my colleague, Deputy Fergus O'Dowd, whom I know Deputy Nash has worked very well with for many years. He will soon be leaving this House and I know he will be missed by many.

As Deputy Nash is aware, the living city initiative is a modest and targeted tax measure, which is aimed at areas with significant architectural heritage in urgent need of regeneration. It provides income or corporation tax relief for qualifying expenditure incurred in the refurbishment and conversion of qualifying residential and commercial buildings located within special regeneration areas, which the Deputy cited, are in Cork, Dublin, Galway, Kilkenny, Limerick and Waterford.

Its aim is to encourage people back to the centre of Irish cities to live in historic buildings. The Finance Act 2022 provided that the living city initiative would be extended for a further five-year period to 31 December 2027. The owner-occupier element of the relief was also enhanced in the Finance Act 2022 for new entrants from 1 January 2023.

The special regeneration areas are designated by the Minister for Finance on independent advice. Maps of the special regeneration areas of each city are available to view online. Specific criteria were set down in respect of the areas that should be included within the remit of the living city initiative, 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, the special regeneration areas should be inner-city areas that 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. Areas that are generally regarded as affluent, have high occupancy rates and which do not require regeneration should not be included. The scheme is targeted at those areas that are most in need of attention.

However, and as the Deputy may be aware, the vacant property refurbishment grant is provided to support the refurbishment of vacant properties in towns and villages across the country. The grant was introduced in 2022 and benefits those who wish to turn a formerly vacant house or building into their principal private residence. A grant up to a maximum of €70,000 is available for the refurbishment of vacant properties for occupation as a principal private residence, and for properties that will be made available for rent.

The living city initiative was reviewed as part of the tax strategy group process in 2022. The review noted that the scheme is a very specific tax incentive, established in compliance with the Department of Finance's tax expenditure guidelines, with the aim of encouraging businesses and homeowners back to the centre of Irish cities.

The review also noted that property-related tax measures facilitated the property boom prior to the financial crisis but were ultimately deemed ineffective as the projects were spread nationwide instead of being targeted on the localities where the need was greatest. In contrast, the living city initiative is a modest, targeted, scheme which is aimed at refurbishment of the existing building stock in very specific areas that are in urgent need of regeneration.

A large-scale expansion of the living city initiative to towns nationwide would amount to a section 23-type relief. Such a move would fundamentally transform the scheme into one where the cost implications are so substantial it would need an ex ante cost benefit analysis. The proposal would have the potential to greatly increase the Exchequer cost.

While, like any other tax measure, it is kept under review and I will undertake to feed into the review all the comments Deputy Nash has made this evening, unfortunately, there are no plans at present to extend the scheme to further areas.

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