Bringing city spaces back into residential use

As mentioned last week, the Living City Initiative (LCI) is a tax incentive scheme for Special Regeneration Areas (SRAs) in Cork, Dublin, Galway, Kilkenny, Limerick and Waterford. It was announced by the Minister of Finance in May 2015 and applies to the selected SRAs above. Basically, it means you can claim tax relief for money spent on refurbishing or converting residential or commercial properties.The intended purpose of the initiative is to encourage people to live in historic – yet underused – city areas.

There are three types of relief available under the LCI:

1.  Owner-Occupier Residential Relief: This scheme offers tax deductions over ten years for outlay on refurb or adaptation of a building that is to be used as a dwelling by the owner. This relief is not on offer to landlords.

2.  Rented Residential (landlord) Relief: The scheme was extended to landlords in January 2017 to encourage an increase in the take-up of the scheme. The relief is given in the shape of an accelerated capital allowance for outlay on refurb and conversion of rental residential property as well as some commercial premises.

3.  Commercial Relief: Not unlike the Rented Residential Relief, it is given in the form of a capital allowance for the expenditure on the refurbishment and conversion of commercial properties.

The capital allowance for Rented Residential Relief and Commercial Relief is given at the rate of 15% of qualifying expenditure for each of the first six years and 10% in year 7.

Refurbishment and Conversion

Refurbishment of a property is defined as when you carry work/maintenance to repair or restore the property. This may include maintaining or repairing water supply, sewerage problems or fixing heating/electrical facilities.

For conversions, there are different classifications that apply to Residential Relief and Commercial Relief. For Owner-Occupier Residential Relief or Rented Residential Relief, a conversion is where you modify a non-residential property into a house or an apartment. Or it may be a good idea to adapt a single property into two or more units or alternatively, change multiple units into one. As for Commercial Relief, the conversion would mean creating a property suitable for retailing goods, providing services within Ireland or for sole or main residence. This includes water supply maintenance, sewerage system repairs or fixing heating/electrical facilities.

The scheme will end for all reliefs on 4 May 2020. Only refurbishment and conversion work that is carried out during this time will qualify for relief.

Further help and advice:

The LCI unit has put together an experienced Advisory Team, hailing from Planning, Architects, Fire prevention, Building Control, Conservation, Valuers and other relevant professional backgrounds. While it is not a requirement, the team will meet with owners or investors to offer advice on legislative planning and development before any work begins. There is further information available on the Revenue website, however, if interested, it might be better to reach out to your local authority directly and please do let us know how you get on with this.

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group