What is Living City Initiative and What Types of Relief are Available?


What is it?

The Living City Initiative is a tax incentive scheme designed to draw property investment towards the regeneration of properties in urban areas. The incentive is limited to specific "special regeneration areas" as noted below.

Where are the Special Regeneration Areas (SRAs)?

At present the Special Regeneration Areas are confined to larger cities, namely;
  • Dublin
  • Cork
  • Limerick
  • Galway
  • Waterford
  • Kilkenny
The respective local authorities for each area have published maps illustrating the boundaries of the areas where the incentive applies. These maps can be found on the individual websites of the relevant local authorities.

What type of relief is available?

There are two types of tax relief available under the scheme 1) Residential Relief and 2) Commercial Relief. For the purpose of this piece, we are providing an overview of the residential relief.

Residential Relief - What types of buildings does the scheme apply to?

The scheme applies to both residential refurbishment and conversion work. It will not, however, apply to "new builds". To qualify a building must have been built prior to 1915 and must have a floor area of between 38 and 210 square meters. Finally, the original use of the property must have been a residential dwelling.

Residential Relief - Who can apply?

Only owner-occupiers may apply. Landlords are not entitled to claim any relief under the residential element of the scheme. There is however a provision to allow developers to carry out qualifying work and sell the refurbished/converted properties to owner occupiers. In that instance the owner occupier may claim then residential relief.

Residential Relief - How does it work?

The scheme allows an owner occupier a deduction from total income over 10 years (i.e an annual deduction of 10% of the qualifying expenditure). Qualifying expenditure be, at a minimum, at least 10% of the market value of the property prior to refurbishment/conversion.

Residential Relief – Example

  • The value of a property is €320k prior to refurbishment/conversion.
  • Qualifying expenditure of €32k is incurred (i.e 10% of OMV, the minimum level)
  • The person can claim a deduction of €3.2k from their annual income for 10 years.

Residential Relief - Other Factors

Revenue have published further details on the detailed conditions of the scheme. Owner occupiers seeking further details are encouraged to review Revenue’s detailed guidelines at www.revenue.ie/en/personal/living-city-initiative.html

What Questions Do You Have?

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