The ‘Living City Initiative’, which was initially piloted in Limerick and Waterford, was extended to include Cork, Galway, Kilkenny, and Dublin by Finance Minister Michael Noonan in Budget 2014.
It is expected to provide a multimillion euro boost to inner cities by encouraging families to move back into city centres and increase commercial footfall by regenerating the retail heartland of central business districts.
Anyone who refurbishes a home or business premises built before 1915 will be entitled to claim back through tax 100% of all monies invested over a period of 7-to-10 years. For example, a householder who spends €100,000 on renovations can claim €10,000 per year for 10 years.
There will be no upper limit to the amount spent but households or businesses must invest a minimum of 10% of the pre-works value of the building.
However, those who pay little or no tax, such as the unemployed or low-wage earners, will be excluded from the scheme.
Refurbishment is very labour-intensive and a detailed cost-benefit analysis carried out by Indecon International Economic Consultants estimates it will create up to 5,500 jobs in construction alone over the next five years. Because all works will be registered, it will also bring many out of the black economy.
Local councils have been tasked by the Department of Finance to draw up boundaries as to which areas will qualify for the scheme. It is estimated that, in Cork alone, around 2,000 buildings will be eligible.
The report says more than 89% of retailers surveyed believe the refurbishment of historical buildings will have a significant economic impact on the commercial viability of city centres and it concludes that Waterford and Limerick alone would see tourism numbers boosted by 11.4%.
The report, carried out on behalf of the Department of Finance, states that the attractiveness of many cities suffered during the Celtic Tiger years from people and businesses moving away — in Limerick, for example, 1,113 old buildings are unoccupied while in Waterford 2,242 buildings are empty.
The scheme operates in a number of EU countries and Mr Noonan is expected to receive EU aid approval over the coming months.
Waterford Fine Gael TD John Deasy, who helped develop the initiative, said it was a lot more lucrative than the Home Renovation Scheme announced in the budget.
He said: “This will provide a much-needed boost throughout Munster for tradespeople such as carpenters, plumbers, and those in the specialised conservation business.”
The Irish Georgian Society has also welcomed the scheme.