Michael McGrath (Cork South Central, Fianna Fail)
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The Living City Initiative (LCI) (provided for in Finance Act 2013 and commenced on 5 May 2015) is a tax incentive aimed at the regeneration of the historic inner cities of Dublin, Cork, Galway, Kilkenny, Limerick and Waterford. The scheme provides income or corporation tax relief for qualifying expenditure incurred in refurbishing/converting qualifying buildings which are located within pre-determined 'Special Regeneration Areas' (SRAs).

There are three distinct types of relief available under the Initiative. These are:

• owner-occupier residential relief;
• rented residential relief; and
• commercial or retail relief.

The LCI scheme was extended for a further five year period to 31 December 2027 in Finance Act 2022. The owner-occupier element of the relief was also enhanced in Finance Act 2022 for new entrants from 1 January 2023. Owner-occupiers may claim the relief over seven years rather than ten. Where they cannot absorb the deduction in-year, claimants will have the ability to carry forward relief up to a maximum of ten years after the expenditure is incurred.

In accordance with s. 372AAA of the Taxes Consolidation Act 1997, "special regeneration area" means an area or areas specified as a special regeneration area by order of the Minister for Finance.

The SRAs were designated by the Minister for Finance on the advice of the relevant city councils and an independent review by a third party advisor. Specific criteria were set down in respect of the areas which should be included within the remit of the LCI which were required to be taken into account by the relevant city councils when putting forward the proposed SRAs for each city. In particular, it was stated that these should be inner city areas which 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. It was specified that areas which are generally regarded as affluent, have high occupancy rates and which do not require regeneration should not be included in the SRAs.

The LCI 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 home-owners back to the centre of Irish cities in order to preserve historic buildings in the special regeneration areas. I have no plans at present to amend the criteria applying to the SRAs.