Michael Ring (Mayo, Fine Gael)
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Question 180: To ask the Minister for Finance the capital allowances available in respect of nursing homes; and the criteria that apply for same. [26000/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Capital allowances are available where capital expenditure is incurred on the construction or refurbishment of certain nursing homes. The cost of the site does not qualify for capital allowances. The nursing home must be operated or managed as a registered nursing home within the meaning of section 2 of the Health (Nursing Homes) Act, 1990 and be registered under section 4 of that Act.

Capital allowances are available over a 7-year period at the rate of 15% per annum for the first 6 years and 10% in year 7. Owner-operators can use the allowances to reduce their taxable income arising from the operation of the nursing home. Investors/lessors can use the allowances to reduce their taxable rental income from the letting of the nursing home and, depending on the amount of their rental income, can set off up to €31,750 annually against their non-rental taxable income. In the case of nursing homes that are first used, or first used following refurbishment, on or after 1 February 2007, the person claiming the capital allowances must continue to own the nursing home for 15 years to avoid a clawback of the allowances granted. Prior to this date the required holding period was 7 years.