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16 Oct

Budget Summary 2014 (16TH OCTOBER, 2013)


Further to the Budget announcement today, here are some of the key measures affecting the property and construction sectors:

 

Home Renovation Incentive (HRI)

The Home Renovation Incentive will provide an income tax credit to homeowners who carry out renovation and improvement works on their principal private residences in 2014 and 2015. The incentive is payable over the two years following the year in which the work is carried out. The credit will be calculated at a rate of 13.5% on all qualifying expenditure over €5,000 up to a maximum of €30,000. Qualifying works include extensions and renovations to the home, window-fitting, plumbing, tiling and plastering. This incentive will support fully tax compliant builders and will move activity out of the shadow economy into the legitimate economy as all expenditure and relief claims will have to be registered electronically with the Revenue Commissioners.

Living City Initiative

Last year the Minister announced the Living City Initiative for Limerick and Waterford. He has decided to extend the initiative to Cork, Galway, Kilkenny and Dublin and broaden the eligibility criteria to include all buildings built prior to 1915. The initiative should assist the regeneration of retail and commercial districts and encourage families to live in the historic buildings in our city centres. It will be commenced after EU state-aid approval is secured.

Capital Gains Tax Relief

In Budget 2012, the Minister introduced an incentive that exempted property purchased by the end of 2013 from Capital Gains Tax if held for at least seven years. He is extending the purchase period to the end of 2014.

Real Estate Investment Trusts

Following the successful launch of the Real Estate Investment Trusts in Ireland, as provided for in the Finance Act 2013, the Minister has agreed with Minister Shatter, to propose the addition of REIT investments to the 5 investment options already in place under the Immigrant Investor Programme launched last year by the Department of Justice. This would be subject to conditions placed on the minimum level of the investment and withdrawal of funds, to ensure alignment with the overall purpose of the programme.

 

Nama Investment

NAMA expects to have approved €2 billion in funding for Irish projects between 2011 and 2015. This level of investment could be increased depending on the pace of economic recovery. The investment will include the construction of 4,500 new houses and apartments in Dublin, in addition to much-needed office accommodation in the city centre and investment in commercially viable retail projects.

NAMA is also willing to make €2 billion in vendor capital available to purchasers of commercial properties in Ireland. It has already lent €375 million of this across six major transactions.

Start Your Own Business scheme

The Minister is introducing a new Start Your Own Business scheme to assist individuals who have been unemployed for at least 15 months to start their own unincorporated businesses by giving them a two year exemption from income tax. This scheme, in combination with the Home Renovation Initiative, will assist construction workers to return to work.

Capital Investment

Our current five year capital framework sets out a €17.1 billion investment programme out to 2017 to maintain and improve the country’s infrastructure.In July of last year, the Minister announced a €2.25 billion infrastructure stimulus package. These projects are progressing as planned. Five of the nine PPP projects have already issued to market and the flagship Grangegorman DIT project - valued at over €200 million – is due to issue by the end of this month. 13,000 direct and many more indirect jobs are expected to be created by this programme. Earlier this year, the Minister announced a further €150 million of direct exchequer capital investment and a further €250 million of PPPs.  The extra Exchequer money is being invested in 28 school projects, maintaining our local road network and a local authority housing insulation scheme.

 

Housing

€10 million has been allocated to resolve the problems at Priory Hall. €10 million will be provided for an unfinished housing estate resolution initiative. Further details of the scheme are yet to be announced by the Minister for Housing.The Minister will also be allocating €30 million of the lottery licence proceeds to recommence the State’s house building programme. This will facilitate up to 500 additional housing units between a small number of new builds and the return of previously uninhabitable units to the housing stock.


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