Finance Act, 1994

Residential accommodation: allowance to owner-occupiers in respect of expenditure on construction or refurbishment.

46.—(1) In this section—

“qualifying expenditure”, in relation to an individual, means an amount equal to the amount of the expenditure incurred by the individual on the construction or, as the case may be, refurbishment of a qualifying premises which is a qualifying owner-occupied dwelling in relation to the individual after deducting from that amount of expenditure any sum in respect of or by reference to that expenditure, or in respect of or by reference to the qualifying premises or the construction or, as the case may be, refurbishment work in respect of which it was incurred, which the individual has received, or is entitled to receive, directly or indirectly, from the State, any board established by statute or any public or local authority;

“qualifying owner-occupied dwelling”, in relation to an individual, means a qualifying premises which is first used, after the qualifying expenditure has been incurred, by such an individual as that individual's only or main residence;

“qualifying premises”, in relation to the incurring of qualifying expenditure, means, subject to subsections (5) and (6) of section 47 , a house—

(a) the site of which is wholly within a designated area, or which fronts onto a designated street,

(b) which is used solely as a dwelling,

(c) in respect of which, if it is not a new house (within the meaning of section 4 of the Housing (Miscellaneous Provisions) Act, 1979 ) provided for sale, there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of construction or, as the case may be, refurbishment of the house to which the certificate relates is not less than the expenditure actually incurred on such construction or refurbishment, as the case may be, and

(d) the total floor area of which—

(i) is not less than 30 square metres and not more than 90 square metres in the case where the house is a separate self-contained flat or maisonette in a building of two or more storeys, or

(ii) is not less than 35 square metres and not more than 125 square metres in any other case:

Provided that where the qualifying expenditure has been incurred on refurbishment of the qualifying premises the reference in paragraph (d) (i) to “90 square metres” shall be construed as a reference to “125 square metres”;

“refurbishment” has the same meaning as in section 45 .

(2) Subject to subsection (3), where an individual, having made a claim in that behalf, proves to have incurred qualifying expenditure in a year of assessment, the individual shall be entitled, for that year of assessment and for any of the 9 immediately subsequent years of assessment in which the qualifying premises in respect of which the individual incurred the qualifying expenditure is the only or main residence of the individual, to have a deduction made from the individual's total income of an amount equal to—

(a) in the case where the qualifying expenditure has been incurred on the construction of the qualifying premises, 5 per cent. of the amount of that expenditure, or

(b) in the case where the qualifying expenditure has been incurred on the refurbishment of the qualifying premises, 10 per cent. of the amount of that expenditure:

Provided that a deduction shall be given under this section in respect of qualifying expenditure only in so far as that expenditure falls to be treated under section 47 (8) as having been incurred in the qualifying period.

(3) Notwithstanding subsection (2), where qualifying expenditure has been incurred in relation to a qualifying premises which fronts onto a designated street, a deduction shall be given under this section if, and only if, that expenditure has been incurred on the refurbishment of the qualifying premises.

(4) Where qualifying expenditure in relation to a qualifying premises is incurred by two or more persons, they shall be treated as having incurred the expenditure in the proportions in which they actually bore the expenditure and the expenditure shall be apportioned accordingly.

(5) All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 142 of the Income Tax Act, 1967 , shall, with any necessary modifications, apply in relation to deductions under this section.

(6) Section 198 (inserted by section 18 of the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended, in subsection (1) (a), by the insertion of the following subparagraph after subparagraph (xiii) (inserted by section 35 of the Finance Act, 1987 ):

“(xiv) so far as it flows from relief under section 46 of the Finance Act, 1994, in the proportion in which they incurred the expenditure giving rise to the relief,”.

(7) The provisions of section 47 shall have effect for the purposes of supplementing this section.