Barry Cowen (Offaly, Fianna Fail)
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302. To ask the Minister for Finance if his Department or a body under its aegis conducted research on the success of the living over the shop incentives schemes; the estimated costs of the different schemes since 1994; and the number of refurbishment projects and residential units created in each year under the schemes. [28264/17]

Barry Cowen (Offaly, Fianna Fail)
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304. To ask the Minister for Finance if his Department or a body under its aegis conducted research on the success of the living over the shop incentives schemes; the reason for the low number of residential units created under the schemes; and the detail of this research. [28267/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 302 and 304 together.

The Living over the Shop (LOTS) incentive was introduced in 2001 in the five city boroughs of Cork, Dublin, Galway, Limerick and Waterford. It provided relief of 100 per cent for eligible expenditure on the refurbishment or conversion of under-utilised space for residential accommodation at a rate of 10 per cent per annum over 10 years, against total income. The incentive closed to new claimants in mid-2006.

The estimated total cost to the Exchequer of the scheme was some €48.7m and an estimated 440 residential units were delivered.

A review of various existing tax incentives was undertaken by my Department, in part internally and in part by Indecon and Goodbody Economic Consultants, and included an examination of the LOTS incentive. The review was published in three volumes in February 2006. Volume two, the Goodbody Review of Area Based Tax Incentive Renewal Schemes, sets out detailed statistics and findings in relation to the LOTS incentive (pp. 111-130).

- At paragraph 7.4.5, the report notes that between 2001 and mid-2006, the estimated cost to the Exchequer was some €35.5m.

- In addition, Revenue has advised me that between 2007 and 2014 (inclusive) the cost to the Exchequer was some €12.9m and in 2015 the provisional cost was some €0.3m.

- An estimated 440 residential units were delivered (paragraph 7.4.2).

At paragraph 7.6.2.1, the review identifies the following reasons for the relatively limited take-up of the LOTS incentive:

- The prospect of taking on an extensive refurbishment project may not have appealed to individuals whose primary occupation was in retail;

- The potential for disruption to the retail business for the duration of the development work may have dissuaded shopkeepers from developing their premises;

- Shopkeepers may have had to relinquish valuable retail or storage space to allow for access to the residential accommodation;

- There may have been security concerns associated with having tenants living above commercial premises;

- A residential unit over a shop may not be attractive to potential tenants given the availability of alternative apartments in purpose built apartment blocks which may offer better facilities. For this reason it is also likely that above the shop units would not be attractive to owner-occupiers, leaving the developer dependent on rental income to provide a return on the investment;

- There were sometimes difficulties in marketing the Scheme due to problems in identifying owners as distinct from tenants of properties; and

- As the designated streets for this scheme were in city centre locations, they may not have been attractive places to live given the proximity of bars and night-clubs resulting in noise, litter and anti-social behaviour.

The review may be found at:

fault/files/Taxrev2006vol2_0.pdf