Download Urban Renewal Scheme, 1999 - Department of Housing, Planning

Circular UR 10 /02
9 October, 2002
Consolidated Certification Guidelines for
Urban Renewal Scheme 1999
Dear Manager,
I refer to earlier Circulars UR 5/99, UR4/01, UR11/01, UR7/02 and UR8/02.
As you are aware, guidelines on certification under section 11 of the Urban Renewal
Act, 1998 were issued in May 1999 for the purpose of specifying the manner in
which local authorities or authorised companies should certify that a development is
consistent with the objectives of an integrated area plan. Revised guidelines in
respect of commercial/industrial incentives were issued in July, 2001 to take account
of EU information requirements regarding Regional Aid Guidelines.
It has now been decided to update and consolidate all previous versions of the
Certification Guidelines and also incorporate changes arising from the Finance Act,
2002, viz. : (a) the extension of the deadline for qualification for tax incentives under the Urban
Renewal Scheme 1999 from 31 December, 2002 to 31 December, 2004 provided
for by section 23 of the Finance Act, 2002
(b) the extension of residential investor (“Section 23” type) tax incentives under the
Urban Renewal Scheme 1999 provided for by section 25 of the Finance Act,
2002
A copy of the guidelines is enclosed for your attention. These guidelines should be
read in conjunction with all relevant Acts.
Compliance with requirements of EU State Aid Law
The implementation of the commercial/industrial elements of the scheme is also
subject to specific conditions to ensure compliance with EU rules on State Aids and
these have been included in these guidelines. (See also Section 372 K of the Taxes
Consolidation Act, 1997, as inserted by the Finance Act, 2000 and amended by the
Finance Acts 2001 and 2002 for complete details.)
In particular, please note that construction, conversion or refurbishment expenditure
is excluded where it is incurred in respect of buildings or structures that are provided
for the purpose of large investment projects the regional aid for which is limited
under the "Multisectoral framework on regional aid for large investment projects"
prepared by the European Commission (OJ No C107, 7.4.1998, p7). This
Framework becomes relevant for commercial and industrial projects with a projected
cost in excess of €50m.
The exemptions available under the Framework will most likely mean that few, if
any, projects will need to be notified. However, local authorities are asked to
identify to the Department commercial and industrial projects or mixed use schemes
where the commercial and industrial element exceeds €50m for confirmation that no
prior notification under the Framework is required. Local authorities should be
aware that additional information may be required by this Department in relation to
the number of jobs that will be created by the development when completed (i.e.
construction jobs are not relevant for the purpose of this analysis) in order to make a
decision in relation to notification under the Framework.
Any queries relating to this circular or the enclosed guidelines should be addressed to
Nora Keneghan at (01) 8882418 (Email: [email protected]) or
Gary Ryan at (01) 8882416 (Email: [email protected]).
Yours sincerely,
_________________________
Pat Macken
Principal Officer
Urban and Village Development Section
To:
cc
Each City and County Manager
Each County Secretary and Town Clerk
Urban Renewal Scheme, 1999
Consolidated Certification Guidelines
October, 2002
Introduction
(a)
(b)
General rules on consistency (Letter of Certification requirement)
Under section 11 of the Urban Renewal Act, 1998 (“the Act”) no relief from
income tax or corporation tax may be granted under Chapter 7 (as inserted by
section 76 of the Finance Act, 1998) or Chapter 11 (as inserted by section 24
of the Finance Act, 2002) of Part 10 of the Taxes Consolidation Act, 1997, in
respect of the construction, refurbishment or conversion of a building,
structure or house (hereinafter referred to as “the development”) unless the
local authority or authorised company which prepared the integrated area plan
concerned has certified in writing, in a manner specified by the Minister, that
such development is consistent with the objectives of the integrated area plan.
The certification process to be applied is outlined in paragraphs 1 to 5 of these
guidelines.
Compliance with EU State Aid law (“Form A” requirement)
The implementation of the commercial/industrial elements of the scheme is
also subject to specific conditions agreed with the EU Commission in order to
ensure compliance with EU State Aid law. It was agreed that the scheme could
proceed within the following parameters (i)
relief is denied to property developers where the property developer or
a person connected with the property developer constructed or
refurbished the building or structure involved,
(ii)
there is no relief in the case of expenditure incurred by owner-occupier
operators of industrial or commercial premises in use in the
agriculture, coal, fishing and motor vehicle industries, and the
transport, steel, shipbuilding, synthetic fibres and financial services
sectors,
(iii)
construction, conversion or refurbishment expenditure is excluded
where it is incurred in respect of buildings or structures that are
provided for the purpose of large investment projects the State Aid for
which is limited under the "Multisectoral framework on regional aid
(State Aid) for large investment projects" prepared by the European
Commission (OJ No C107, 7.4.1998, p7). This Framework is only
relevant in respect of commercial/industrial projects with a projected
cost in excess of €50 million.
(iv)
capital allowances under the scheme do not apply in respect of the
expenditure incurred on industrial and commercial premises where any
part of that expenditure is met by way of grant aid or any other form of
aid granted by or through the State, any board established by statute,
any public or local authority or any other agency of the State. The
effect of this restriction is that persons may avail of either tax reliefs
under the Urban Renewal Scheme or aid from a State body but not
both.
(c)
(d)
The information required in order to assist in meeting EU reporting
requirements in this regard must be provided on Form A at Appendix III.
While the provision of this information is separate from that necessary to
assess the consistency of the development with the integrated area plan, any
final letter in regard to consistency cannot issue until this information is
provided as outlined in paragraphs 1, 4 and 5.
Extension of the qualifying period (verification requirement)
By virtue of section 23 of the Finance Act, 2002, the deadline for qualification
for both commercial/industrial and residential tax incentives under the Urban
Renewal Scheme, 1999 may, in certain circumstances, be extended from 31
December 2002 to 31 December 2004.
(e)
This extension will apply where the relevant local authority gives a certificate
in writing on or before 30 April 2003, to the person constructing or
refurbishing a building or structure or part of a building or structure, the site of
which is wholly within a qualifying area, stating that it is satisfied that not less
than 15% of the total cost of constructing or refurbishing the building or
structure or the part of the building or structure, as the case may be, and site
thereof, had been incurred on or before 31 December 2002.
(f)
Details of the information required by local authorities in order to certify
compliance with the 15% expenditure requirement in respect of those wishing
to avail of the extension of the deadline for qualification for tax incentives is
outlined in Appendix I. It is important to note that the local authority is
required to satisfy itself as to the veracity of the information provided by those
wishing to avail of this extension before certification. While this process is
separate from the assessment of consistency of the development with the
integrated area plan, any final letter in regard to consistency cannot issue until
this information is provided and certified as outlined in paragraphs 1, 4 and 5.
(g)
(h)
(i)
Extension of “Section 23” relief (verification requirement)
By virtue of section 25 of the Finance Act, 2002 residential investor tax
incentives are now available to areas already designated for residential owneroccupier incentives under the current Urban Renewal Scheme where
qualifying expenditure is incurred on or in relation to a house on or after 5
December 2001.
Expenditure incurred on or in relation to a house prior to 5 December 2001
may also qualify for residential investor relief where –
(i)
a contract for the purchase of the house had not been evidenced in
writing by any person prior to 5 December 2001, but
(ii)
a contract for the purchase of the house is evidenced in writing on or
before 1 September 2002.
This change will not alter the existing designations as between refurbishment
and new build. The respective residential investor incentive can only be
applied on the basis of the existing residential owner-occupier refurbishment
or new-build designation. Therefore -
(i)
where residential owner-occupier (new build) was granted, residential
investor (new build) will also apply, and
(ii)
where residential owner-occupier (refurbishment) was granted,
residential investor (refurbishment) will also apply.
(j)
These provisions only apply to individual sub-areas designated under the
scheme and not where incentives were approved on an “area-wide” basis in an
integrated area plan.
(k)
Details of the information required in respect of those wishing to avail of the
extension of residential investor tax incentive is outlined in Appendix II. It is
important to note that the local authority or authorised company is required to
satisfy itself as to the veracity of the information provided by those wishing to
avail of this extension. While this process is separate from the assessment of
consistency of the development with the integrated area plan, any final letter
in regard to consistency cannot issue until this information is provided and
verified as outlined in paragraphs 1, 4 and 5.
(l)
(m)
(n)
Notification
Those wishing to avail of any of the reliefs provided for in Chapter 7 and/or
Chapter 11 of Part 10 of the Taxes Consolidation Act, 1997 should be advised
of the certification arrangements set out in these guidelines at the earliest
opportunity. They should also be urged to liaise with the certifying local
authority or authorised company during the pre-construction phase of a
development to ensure that there are no undue delays in processing
applications for certification.
The guidelines are issued without prejudice to the provisions of the Planning
and Development Act, 2000, the Building Control Act, 1990, any regulations
made under those Acts and the provisions of the relevant local authority’s
Development Plan. It is recommended that applicants for certification be
advised of the possible need to seek planning permission for their proposed
developments.
Definitions
All terms used in these guidelines have the same meaning as those given to
them for the purposes of any relevant statutory provisions.
Certification Procedures
1.
Application for Letter of Certification
A person wishing to avail of any of the reliefs provided for in Chapter 7 or
Chapter 11 of Part 10 of the Taxes Consolidation Act, 1997 must make a
formal written application for a Letter of Certification (a letter which certifies
that the development concerned is consistent with the objectives of the
integrated area plan) to the relevant local authority or authorised company as
detailed beneath.
The application should include (i)
in all cases name, address and telephone/fax numbers of the developer,
address of development for which certification is sought and
the integrated area plan sub-area reference,
relevant planning permission reference number(s), if applicable
and date of issue,
a copy of the commencement notice, if applicable, under the
Building Control Act for the relevant development,
such other documentation or information as the relevant local
authority or authorised company may require for the purposes
of its consideration of the certification application.
(ii)
in addition to sub-paragraph (i) above, where a person is availing of
relief on expenditure incurred after 6 April 2001 on the development of
a qualifying commercial or industrial building or structure, a statement
indicating that no grant aid has been or will be received in respect of
such development (this must be done by completing Form A at
Appendix III) and any further information as may be necessary to
enable compliance with the reporting requirements of the European
Commission,
(iii)
in addition to sub-paragraph (i) above, where a person is availing of the
extension of the deadline to 31 December 2004 for qualification for tax
incentives provided for by section 23 of the Finance Act, 2002 -
the letter issued by the local authority which certified that 15%
of the total project costs had been incurred on or before 31
December, 2002, or
-
if before the 30 April 2003, the information required to allow
the local authority to make such a determination,
and
(iv)
in addition to sub-paragraph (i) above, where a person is availing of the
extension of residential investor incentive provided for by section 25 of
the Finance Act, 2002,
-
the letter in which the local authority or authorised company
stated it was satisfied, based on the information provided, that
the residential investor incentive (provided for by section 25 of
the Finance Act, 2002) applies as respects expenditure incurred
on or in relation to a house or
-
the information required to allow the local authority or
authorised company to make such a determination
Where a person requires “first-stage” notification, as outlined at paragraph 3
beneath, an application providing the information above, as appropriate,
should be made prior to the commencement of the relevant development.
2.
3.
Assessment of consistency with integrated area plan
The local authority or authorised company must satisfy itself that the relevant
development or part thereof is consistent with the objectives of the integrated
area plan concerned, by applying the following criteria (i)
the development has been completed,
(ii)
the development has been carried out in support of the objectives of the
integrated area plan,
(iii)
the development complies with any specific conditions set out in the
integrated area plan in relation to development in the area to which the
plan relates or in relation to development in any part or parts of that
area,
(iv)
the use or uses proposed for the building, structure or house are
consistent with the uses for which the area in which the building,
structure or house is located, has been declared to be a qualifying area
for the purposes of one or more sections of Chapter 7 or Chapter 11 of
Part 10 of the Taxes Consolidation Act, 1997, and
(v)
the design of the building or structure takes account of the nature and
character of the area in which it is located and complies with any other
design standards set out in the integrated area plan.
“First-stage” notification
While the local authority may only decide whether any particular
development, or part thereof, is or is not consistent with the objectives of the
integrated area plan after the development has been completed, where the local
authority or authorised company is of the opinion that the development will,
when completed, comply with the criteria in paragraph 2, and where the
incentives concerned otherwise apply, it may confirm such in writing where
requested to do so. However, such confirmation should clearly specify all
other conditions which will have to be complied with before the final Letter of
Certification can issue as outlined in paragraph 4.
4.
(a)
Issue of Letter of Certification
The local authority or authorised company should, upon notification of the
completion of the development, issue a Letter of Certification within one
month of such notification, certifying that the development is consistent with
the objectives of the integrated area plan subject to (i)
it being satisfied that the development meets the criteria outlined in
paragraph 2, and
(ii)
all appropriate information being provided as outlined in paragraph 1
and, where necessary, the local authority or authorised company
satisfying itself as to the veracity of the information provided.
(b)
Certification may, where appropriate, relate only to that portion of the
development being undertaken in relation to an entire building or structure
which the local authority or authorised company considers to be consistent
with the objectives of the integrated area plan.
5.
(a)
Refusal to issue Letter of Certification
A Letter of Certification cannot issue where (i)
the local authority or authorised company is of the view that the
conditions outlined in paragraph 4(a)(i) have not been met. In this case,
the local authority or authorised company should, within one month of
the receipt of the application or additional information required, advise
the person concerned that it is of that view, and that the person has one
month in which to make representations on the matter before a final
decision is made.
Where it is decided to refuse certification, the notification to this effect
must include the grounds upon which the local authority or authorised
company made that decision and, where appropriate, outline the
alterations necessary to make the development consistent with the
objectives of the integrated area plan.
(ii)
the conditions outlined in paragraph 4(a)(ii) have not been met. In this
case, the local authority or authorised company should immediately
inform the person concerned that the Letter of Certification cannot
issue until the outstanding matters are resolved.
Appendix 1
Verification of expenditure in respect of the extension of the qualifying period
provided for by section 23(1) of the Finance Act, 2002
A.
Where a person wishes to avail of the extension of the deadline for
qualification for tax incentives provided for by section 23 of the Finance Act,
2002, he or she must make a formal application to this effect to the local
authority.
B.
The application should include the following information (where such
information has not already been provided in obtaining “First stage”
certification as detailed at paragraph 3, or otherwise) -
-
name, address and telephone/fax numbers of the developer,
address of development for which certification is sought and
the integrated area plan sub-area reference,
relevant planning permission reference number(s), if applicable
and date of issue,
a copy of the commencement notice, if applicable, under the
Building Control Act for the relevant development,
a comprehensive submission, certified by a Quantity Surveyor,
Valuer or similar, providing details of the site and development
costs incurred by the date of application or 31 December 2002
whichever is the earlier and the total project costs,
the name and address of the Quantity Surveyor, Valuer or
similar used,
such other documentation or information as the relevant local
authority may require for the purposes of its consideration of
the certification application.
C.
Where, on the basis of the information provided, the local authority is satisfied
that at least 15% of the total project costs have been incurred on or before 31
December 2002, it shall issue a letter to the person concerned to that effect as
soon as possible, or in any event not later than 30 April 2003. A copy of this
letter should also be forwarded to Urban and Village Development Section,
Department of the Environment and Local Government.
D.
Where, on the basis of the information provided, the local authority is not so
satisfied, the person concerned should be so advised.
Appendix II
Verification of expenditure in respect of the extension of residential
investor relief provided for by section 25 of the Finance Act, 2002.
A.
A person wishing to avail of the extension of residential investor incentives
will be required to submit to the local authority or authorised company -
a signed declaration stating the date on which the relevant expenditure
was first incurred, and
-
a copy of all relevant contracts.
B.
Where, on the basis of the information provided, the local authority is
satisfied, that in so far as it is able to determine, the extension of residential
investor incentives (provided for by section 25 of the Finance Act 2002)
applies as respects expenditure incurred on or in relation to a house, the local
authority shall issue a letter to that effect to the person concerned as soon as
possible.
C.
Where, on the basis of the information provided, the local authority or
authorised company is not so satisfied, the person concerned should so
advised.
D.
These verification procedures are not required in respect of developments on
sub-areas already designated for the residential investor tax incentives prior to
the extension provided for by the Finance Act, 2002.
Appendix III
FORM A
Urban Renewal Scheme 1999 - Commercial/Industrial Incentives
Name of applicant: ___________________________________________________________________
Address: ___________________________________________________________________________
Telephone no: __________________________________
Fax: ____________________________
Development name and sub-area reference: _______________________________________________
Address: ___________________________________________________________________________
Contact person: _____________________________________________________________________
Address: ___________________________________________________________________________
Telephone no: _______________________________________________________________________
Planning permission reference no.(s) ___________________ Date of issue: _____________________
Copy of Commencement Notice attached?
(Please tick appropriate box)
YES
NO
NO
EU REQUIREMENTS
Estimated cost of the development:
For tax purposes, the beneficiary of the
capital allowances is:
(Please tick appropriate box)
€ _________________________________________________
Incorporated
company
Individual
Other*
*if other please specify:________________________
(a)
I confirm that no grant aid or any other form of aid has been or will be received in respect of
the development from or through the State, any board established by statute, any public or
local authority or any other agency of the State,
(b)
I undertake to furnish to the Minister for Finance (or to a person or body nominated for that
purpose by the Minister for Finance), upon request, such further information as may be
necessary to enable compliance with the reporting requirements of the European Commission
in relation to EU State Aid law, and
(c)
I declare that to the best of my knowledge and belief, the information supplied above is
correct and complete.
Signature: __________________________________________________________________________
Name: ______________________________________________________
(BLOCK CAPITALS)
Date: ______________