Renewal Scheme for Traditional Seaside Resorts

Renewal Scheme
for Traditional Seaside Resorts
(Mayo, Ireland)

With effect from 1 July 1995, the Government has introduced, on a pilot basis, an exciting investment scheme designed to encourage and facilitate the redevelopment of many of Ireland's traditional seaside resorts.

Ireland's coastal destinations can appeal to both overseas and domestic tourists. Their strategic location around our coast-line has evolved over many years, through the natural desire of holiday makers to participate in the various forms of entertainment and activities which they can offer. In common with all forms of tourist endeavours, resort towns and communities must invest substantial sums in their facilities if they are to compete for a growing and discerning market.

The Pilot Scheme for the Renewal of Traditional Seaside Resorts presents an attractive opportunity to ensure that such investment in essential tourist facilities is made in a focused manner. The Government, through the Scheme, in partnership with entrepreneurs hope to achieve a common objective - growth and improvement in the fortunes of key assets in the overall tourist "product".

Outline of the Scheme

A range of tax incentives are available for investment in qualifying tourist facilities in designated traditional resort areas. In County Mayo the designated areas are Westport and Achill Island. Allowances apply to investment made during the three year period commencing 1 July 1995 and ending 30 June 1998.

The reliefs may be divided into two primary areas:

Tax incentives for tourist related trades
The letting of tourist accommodation

These incentives are being introduced as a pilot scheme to promote the regeneration of traditional seaside tourist resorts. The Scheme is intended to encourage investment in tourist-based buildings, and to enable resort-towns to offer modern facilities which cater for changing demand.

Who will benefit?

From Tax-Reliefs:

Providers of registered and listed accommodation
Operators of specified tourist facilities
Landlords and qualifying tenants in designated areas
Investors in qualifying buildings

From the Scheme in general:

Visitors, both foreign and domestic, through improved facilities.
Townspeople and communities in designated resorts through urban renewal and spin-off investment
Those interested in Ireland's tourist industry through improved infrastructure

What facilities qualify?

Qualifying registered and listed tourism accommodation are as follows:

Bed and Breakfast establishments
Caravan and camping sites
Guesthouses
Holiday apartments
Holiday camps
Holiday cottages
Holiday hostels
Hotels
Youth hostels

Qualifying non-accommodation tourist facilities include:

Car hire operations
Car parks
Craft exhibition and demonstration centres
English/Irish language schools
Entertainment facilities eg theatres, bowling alleys, amusement arcades, (excluding activities licensed under the1956 Gaming and Lotteries Act)
Improvements to existing activities licensed under the 1956 Gaming and Lotteries Act
Improvements to existing heritage building with public access
Indoor/outdoor adventure and amusement centres/parks
Leisure/sports facilities, eg swimming, water sports, tennis, squash, golf, angling and equestrian
Licensed premises, including existing retail outlets which are an integral part of and located in the premises
Marina mooring and breakwater facilities
Restaurants/cafes
Retail outlets which are an integral part of, and located in, tourist buildings qualifying under Section 47 and 48 of the 1995 Finance Act
Theme/interpretative centres/parks
Tourist information facilities.

What expenditure qualifies?

Expenditure incurred on the construction of a new building (excluding site cost), or the refurbishment (provided it exceeds 20% of the pre refurbishment value) of an existing building, qualifies for relief. If the expenditure straddles the qualifying period, there are rules for apportionment, so that only expenditure incurred in the qualifying period obtains the reliefs.

Example Saving

In this example we assume that tax is paid at 48%, the top rate of income tax.


Mary wants to build a restaurant. The construction costs involved in under-taking this project will be £120,000
The tax relief available is as follows:
	Tax Relief IR£	Cost IR£
Capital cost		120,000
Tax relief saving - Year 1 (Note 1)	43,200
Annual tax allowance of £2,800 (Note 2)	14,400
Total tax relief	57,600	(57,600)
Total net cost - end of year 6		62,400
Note 1 - Allowances claimed in year 1 £120,000 @ 75% @ 48% =	43,200
Note 2 - Annual allowance over 5 years £120,000@5%@48% x 5 =	14,400