As I said, the original article was finfacts. But give me a week of research and I’ll have something a bit more substantial. I usually trust http://www.finfacts.ie on these things, but sure no harm to double-check.

Tax Shelters for Property Investors

Changes in tax legislation over the past number of years has resulted in the phasing out of the various tax shelters for Property Investors. Of the remaining schemes, a critical condition is that expenditure must be incurred by the relevant date for the particular scheme in order for the relief to apply. KPMG can assist in establishing what this effectively means for a particular project in terms of the maximum amount qualifying for the relief.

* Relief for Rented Residential Accommodation -“Section 23 Type” Relief

Section 23-type relief provides relief in respect of capital expenditure incurred on the construction, refurbishment or conversion of rented residential accommodation. The relief is granted by way of a deduction against Case V income.

Any rental loss created as a result of the deduction may be offset against other Irish rental income of the taxpayer in the current or subsequent periods. This relief applies where the conditions for “qualifying premises” let under a “qualifying lease” are met.

* Section 50 relief – Student Accommodation

Section 50 relief operates in a similar manner to the relief for rented residential accommodation above. However, Section 50 relief specifically relates to qualifying student accommodation property transactions. It is important to note that there are a number of complex conditions to be met in order for the relief to apply. Equally, rules apply in calculating the amount of expenditure, which qualifies for this relief.

* Other reliefs available include those available under the following schemes:

Rural Renewal Scheme 1999 – incentives for property development in the upper Shannon region. It will apply to all of counties Leitrim and Longford, as well as certain areas in Cavan, Roscommon and Sligo. Available, subject to certain restrictions and conditions, until 31 July 2008.

Urban Renewal Scheme 1999 – incentive for property development in areas, as approved by the Minister for the Environment, selected from integrated area plans drawn up by local authorities. Available, subject to certain restrictions and conditions, until 31 July 2008.

Living Over the Shop Scheme 2001 – incentive for the development of vacant spaces over commercial premises in Dublin, Cork, Waterford, Galway and Limerick. It applies to expenditure on certain buildings, which front on to a “qualifying street” in the above cities, as designated by local government and the Minister for the Environment. Available, subject to certain restrictions and conditions, until 31 July 2008.

Town Renewal Scheme 2000 – incentive for the redevelopment of small and medium sized towns (i.e. populations between 500 and 6,000). The scheme relates to the development of industrial, commercial and residential property in any of the 101 approved town renewal plans submitted to the Department of Environment and Local Government. Available, subject to certain restrictions and conditions, until 31 July 2008.

Multi-Storey Car Parks – incentive for the development of car parks consisting of two or more storeys. Available, subject to certain restrictions and conditions, until 31 July 2008.

Park and Ride Facilities – Incentive for development of qualifying facilities and associated residential and commercial premises. Available, subject to certain restrictions and conditions, until 31 July 2008.

Venture capital investment in Irish companies in 2006 amounted to just €192 million invested in 52 enterprises compared with Irish investors putting €11 billion in commercial property – €3 billion of this was spent on domestic deals.

While some lollipops have been offered to promote business start-ups in the export sector over the past decade, a halving of capital gains tax from 40% to 20% coupled with a massive extension of tax incentive schemes for domestic construction at a time when economic fundamentals were very strong, made property the default investment and the riskier export sector was just frozen out.

Accountancy firms soon found that producing business plans for start-ups was a mugs’ game compared with getting involved in property investment.

Full article here:
http://www.finfacts.com/irelandbusinessnews/publish/article_1010263.shtml

The point I’d like to make, though, is that rampant speculation in property and housing has been socially managed, through government incentives and tax breaks. It is not the result of some spontaneous overflowing of powerful emotion. Add to that the ‘common sense’ view of property and housing as a ‘safe bet’, along with banks flushed with easy credit for ridiculous mortgages, and you’ve got a situation – socially managed as well – that should never have been allowed to occur.

To go back to Michael’s point, though. We do need to start investing in jobs, not just renting them.