Vacant and disused upper-storey space in five towns and cities is being targeted to boost the supply of rented accommodation in a new Living Over The Shop (LOTS) tax incentive scheme.
Some 13,000 metres of streets have been designated for the new tax incentive scheme in Dublin, Cork, Limerick, Waterford and Galway.
Mr Robert Molloy, Minister of State with responsibility for housing and urban renewal, said it would help unlock the residential potential that exists in vacant areas over shops in many of the key streets in major cities. The LOTS scheme will run until December 31st, 2004.
The designations were based on proposals prepared and submitted by the five county boroughs on the basis of criteria drawn up by the Department of Environment and Local Government and recommendations made by a specially-established Expert Advisory Panel.
The scheme was designed to allow the county boroughs flexibility in choosing streets.
This was achieved by selecting streets on the basis of aggregate street-length limits set for each of the five cities.
A total of almost 13,000 metres of street have been designated - more than 90 per cent of what the county boroughs had sought.
The total length of streets designated for Dublin is 6,700 metres, mainly in the north inner city.
The final figure for Cork is 2,800 metres, with 1,000 metres designated in Waterford, 1,500 in Limerick and 900 in Galway.
The successful implementation of the new scheme poses a major challenge for the county boroughs and the business communities in the streets benefiting under the scheme, according to Mr Molloy.
"To ensure its success, the county boroughs will have to devote considerable efforts to promoting the scheme locally," he said.
Approved developments within the designated areas will attract both commercial and residential tax incentives.
The residential incentives for owner-occupiers differ from the urban/town renewal schemes because the incentive is the same for both new building and refurbishment.
Both owner-occupiers and investors/lessors are entitled to benefit from the tax incentives. Owner-occupiers can offset 100 per cent of the cost of refurbishment and new building over 10 years against total income.
Investors can offset 100 per cent of costs against rental income, including income from other lettings.
There are also capital allowances for commercial development. A minimum size of 592 sq ft of residential space will apply under the LOTS scheme.
A more restrictive pilot LOTS scheme was introduced in 1994, which had some success in Cork but was held back by non-tax related factors in Dublin.
It has been a major source of concern to planners, policy-makers and city residents that acres of upper-storey space were becoming increasingly derelict at a time of very high demand in the rental sector.
This new LOTS scheme has been designed to attract investment and enhance city living. The Expert Panel emphasised the importance of a "proactive, promotional role" by the local authorities.
