New towns designated under the Living City Initiative

The Living City Initiative is a scheme of property tax incentives covering various reliefs aimed at the regeneration of certain areas. The scheme offers relief from income tax or corporation tax for qualifying expenditure on the refurbishment and/or conversion of buildings located in Special Regeneration Areas (SRAs). Last week the Tánaiste and Minister for Finance, Simon Harris, signed orders to formally designate five additional towns, Athlone, Drogheda, Dundalk, Letterkenny and Sligo under the Initiative. 

In addition, Revenue has published updated guidance on the Living City Initiative and has also published new guidance on different elements of the relief including,  owner occupier residential relief and commercial, rented residential and living over the shop elements of the relief.

The guidance includes details of the Finance Act 2025 amendments to the Living City Initiative which took effect from 1 January 2026 and include:

• The introduction of section 372AAE into the Taxes Consolidation Act 1997, which provides for a new living over the shop element to the scheme. Relief is available in respect of the conversion or refurbishment of certain commercial or industrial properties (which were rateable premises) into residential units.

• An amendment to the pre-1915 building age requirement that applied to the owner occupier and rented residential elements of the scheme, to provide that residential premises built before 1975 in Special Regeneration Areas will be eligible for relief.

• Confirmation that relief for qualifying expenditure on the rented residential, commercial and living over the shop elements of the scheme is allowed over two years at a rate of 50 percent per annum.

• Provision for up to a maximum of €300,000 in tax relief per undertaking over a rolling 3-year period for the rented residential, commercial and living over the shop element of the scheme and thereby removing the limit of €200,000 per project.

• The removal of the restriction on the rented residential and commercial elements of the scheme which required three times the amount of a grant received or receivable to be deducted from qualifying expenditure. It now instead provides that the amount of the grant received is to be deducted.

• The removal of the restriction on property developers or connected parties claiming relief in certain circumstances.