Time to avail now of property incentives

the_syco

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unison.ie
TAXPAYERS wishing to avail of tax incentives relating to property should make their investments within the next few months to insure that they beat a deadline for termination of the various schemes.

That is the advice of tax expert Sandra Gannon, co-author of the Tab guide to personal finance.

The Finance Minister has appointed two groups to review the various tax incentive schemes relating to property and the report is due in September.

This could mean termination of the schemes ahead of the July 2006 deadline.

There are a myriad of property tax incentives available, including urban renewal, rural renewal, town renewal, living over the shop schemes, multi-storey car parks, student accommodation, park and ride facilities, hotels, holiday cottages, nursing homes, sports injuries clinics and childcare facilities.

"Each has different conditions for eligibility, so it's important to check with your accountant or tax adviser before buying one of these properties," Ms Gannon advises.

The most popular and well-known scheme is probably Section 23 relief, which is available on properties constructed in urban, rural and town renewal areas as well as student accommodation and park and ride schemes.

If you purchase a Section 23 property you can offset a portion of the purchase price of the property against all your Irish rental income.

"Typically, the relief works out at around 80pc-85pc of the purchase price, but you must keep the property and let it under a qualifying lease for ten years from the date of purchase" Ms Gannon warns.

Otherwise, she stated, the Section 23 relief granted will be clawed back.