The Rural Renewal Scheme, which is aimed at regenerating parts of the Upper Shannon region, was first introduced in 1998. The scheme provides tax incentives for commercial and residential developments. The commercial part of the scheme is in operation from 1 July 1999 to 31 December 2002.

The residential part of the scheme originally applied only to properties which were let. The Finance Act 1999 extended the scheme to owner-occupied houses which comply with certain specifications. The scheme covers all of the counties of Leitrim and Longford as well as certain areas in the counties Cavan, Roscommon and Sligo. It is based on the District Electoral Divisions. Two different tax reliefs are available under the scheme in respect of expenditure incurred on the construction, refurbishment and conversion of residential property located in these areas:

• Owner Occupied Relief - where an individual is allowed the cost of all or part of the expenditure on his/her main residence as an additional tax-free allowance.
• Rented residential accommodation relief - Where the owner is allowed deduct all or part of the expenditure on a rented house in calculating his/her rental income.

The Irish Times reports today on a development in a designated rural renewal area. Called Lis Cara, the new development of townhouses is close to the main street of Carrick-on-Shannon, Co Leitrim, and it offers section 23-type tax relief to both owner-occupiers and investors under the rural renewal scheme. Owner-occupiers in Lis Cara will receive an additional tax-free allowance for 10 years.

There are 39 two and three-bedroom townhouses in the scheme, with prices ranging from I£99,000 to I£112,000. There are 25 three-bedroom townhouses at Lis Cara, and 14 two-bedroom townhouses. The first phase of Lis Cara will be completed before December 31, in order to qualify for this tax year.