Properties in inner city set to benefit from new tax break

The Government has identified the areas in Galway’s inner city which will qualify for tax breaks under an urban regeneration scheme.

Owners of buildings built prior to 1915 can claim 100% tax relief on their refurbishment over ten years if they make it their private home.

And those who carry out renovations on buildings within the city’s Special Regeneration Areas for retail and commercial use are also entitled to 100% relief over seven years – these buildings are not restricted to pre-1915.

The relief is targeted at owner-occupiers rather than property developers.

Included in the city’s SRAs are all of the ‘West’ and Small Crane area, as well as both ends of Dominick Street.

East of the river, the terraces in Woodquay stretching down to Hidden Valley, St Brendan’s Avenue up to Eyre Street and down Mary Street, both ends of Abbeygate Street, parts of market Street, Bowling Green, St Augustine Street, Whitehall and a block bounded by Middle Street, Buttermilk Walk and St Nicholas’ Street.

Several buildings on Dock Road from Dock No 1 bar are included, as well as a number of protected buildings at the far end of the street.

Conditions exist on what qualifies as expenditure, and there are caps on total expenditure, while work on buildings being renovated for use as a home must cost at least 10% of the open market value of the building prior to the work.

The ‘Living City Initiative’ was announced by Finance Minister Michael Noonan in 2013 for parts of Galway, Cork, Dublin, Limerick, Kilkenny and Waterford, but the SRAs were not published until this week. The idea is to rejuvenate the city and attract more residents back to living in the city centre as well as reviving the central businesses.

It will target in particular run-down and dilapidated vacant residential and business buildings in need of refurbishment.  The project is to be funded by the European Union.

It’s understood that the City Council’s Chief Executive Brendan McGrath and management from other local authorities met with Minister Noonan this week to discuss details of the SRAs.

For houses that are at least 100 years old, the work to be carried out must incur at least 10% of the open market value of the property to qualify. There is no upper limit to the amount of qualifying expenditure.

The person – if they live in the property for 10 years – is then entitled to a 10% reduction in their taxable income each year for ten years.

For commercial or retail buildings, the relief is not restricted to pre-1915 buildings and is set at 15% of the qualifying expenditure for each of six years, and 10% in year 7, although there is an overall cap of €200,000.

The City Council will provide assistance to those who wish to make an application under the scheme, which then goes on to be handled by Revenue.