The abolition of capital gains tax (CGT) on the sale of retail premises could lead to 20,000 of these being converted into housing, it has been claimed.
In addition extending the vacant property refurbishment grant to those who wish to convert such premises into accommodation could yield a further 20,000 properties, said the Hardware Association of Ireland (HAI).
The HAI, which represents hardware and builder’s merchants, said “above-the-shop” premises could be easily converted into accommodation with the right financial incentives.
Figure obtained by The Irish Times last month revealed that 5,746 commercial properties and 2,126 mixed-use premises – generally buildings with ground-floor shops, restaurants or offices with flats above – were vacant in Dublin alone.
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Capital gains tax (CGT) is levied at 33 per cent on the sale of a commercial premises. The HAI is suggesting that the tax be waived for up to three years to allow for the conversion of retail premises into homes.
The HAI carried out a survey among its members and local auctioneers who own “above-the-shop” properties.
“A punitive vacant property tax, increasing annually after a three-year grace period, would push property owners toward action, either through sale or development, while giving them a reasonable window to prepare,” the HAI said in the conclusion of its report.
“This grace period of three years would also facilitate the time required to prepare a database of such properties.”
It also suggested extending eligibility for the vacant property refurbishment grant of up to €50,000 to renovate a vacant property and up to €70,000 if the property is derelict.
The HAI report said the grant had been popular with 11,000 applications and 7,700 approvals to the end of last year, but it was only available to those renovating single homes and, at a maximum, one rental property.
Extending the grant to those who wish to convert retail premises into accommodation could yield many more units, the HAI report said. It could yield a further 20,000 properties on top of the 20,000 properties that could be released for the housing market if CGT were waived for a certain period.
The survey found 93 per cent of respondents favoured a waiver on capital gains tax for the sale of retail properties to be converted into residential.
Fifty-seven per cent of respondents said there were many commercial properties in their area that could be converted into living units.
Of those who own “above-the-shop” properties, half said these were empty, a further 30 per cent said they were only used for storage and 16 per cent said the building was completely empty. Only 4 per cent were occupied.
Half of respondents said their above-the-shop properties could yield two one-bedroom apartments and 37 per cent said there was room for a pair of two-bedroom apartments.
Of those with commercial properties, 70 per cent said they believed that their premises would decrease in value if the status quoremained; 29 per cent stated their value would stay the same or increase.
The HAI initiative is being supported by DublinTown, the lobby group for commercial businesses in Dublin.
“Revitalising vacant ‘above-the-shop’ properties is a vital step toward breathing new life into our towns and villages across the country,” HAI chief executive Martin Markey said.
“By introducing targeted tax incentives and streamlining regulations, we can unlock the potential of these spaces, creating much needed homes and boosting local economies.”
