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Living City Initiative (LCI)

  1. Overview
  2. LCI definitions
  3. Before you begin work on a residential property
  4. After you finish work on a residential property
  5. Conditions for claiming and use of the property
  6. Rented Residential Relief and Commercial Relief
  7. Owner-Occupier Residential Relief
  8. Claiming Owner-Occupier residential relief

Claiming Owner-Occupier residential relief

If you pay your tax under the Pay As You Earn (PAYE) system, use myAccount to claim online through your Income Tax Return. You can make the first claim after the end of the first year for which you are allowed the relief. 

You will receive relief in your wages through an increase in your tax credits. A credit for the Living City Initiative (LCI) will be included in your Tax Credit Certificate (TCC) each year for the remaining years for which relief is available.

If you are self-assessed, use Revenue Online Service (ROS) to claim online through your Form 11 return for each year that the relief applies.

How much can you claim?

You can only claim relief on the amount you spend on work that you carry out during the qualifying period. You cannot claim for advance payments for materials or work that will not be carried out during the qualifying period.

You may buy a refurbished or converted property directly from a developer and then become the first person to live in the property. If so, you can claim the relief.

Your builder must tell you what percentage of the total cost is related to the refurbishment or conversion. This is in order to claim the correct amount of relief.

The builder will have to pass the Letter of Certification to you as proof that the house qualifies for tax relief under the scheme. You should be able to show that you have fulfilled all the relevant conditions and that you are allowed the relief.

  • Example

    A builder buys a derelict property for €75,000. He spends €25,000 on refurbishment (total cost €100,000). The fully refurbished property is sold for €150,000.

    The builder spent 25% of his total costs on refurbishment. At the time of sale, he tells you this percentage. This is then applied to the sale price and results in a total claim for relief of €37,500 (€150,000 x 25%).

    If the property is first used, after refurbishment, as your main residence before 1 January 2023, the relief is spread evenly over ten years. This results in a deduction of €3,750 per annum.

    If you are unable to claim the full 10% relief in one year, you cannot carry forward the unused relief and it is lost.

    If the property is first used, after refurbishment, as your main residence on, or after, 1 January 2023, the relief is spread over seven years. You can claim 15% of the qualifying costs each year for the first six years.  You can claim the final 10% of the qualifying costs in the seventh year. This results in a deduction of €5,625 per annum for the first six years and €3,750 in the seventh year. If you are unable to claim the full relief in one year, you can carry it forward and claim it in another year. You must claim the relief carried forward within the ten-year period or it is lost.

What costs are covered?

You can only claim relief on the direct costs of refurbishment and conversion. These costs include:

  • building materials
  • hire of equipment
  • labour costs
  • administrative overheads
  • architects' and engineers' fees
  • painting and decorating
  • and
  • local authority fees to provide certain infrastructure and services that directly relate to the property.

You can claim the cost of the below items if they are installed during the refurbishment. They must also form part of the fabric of the building:

  • bathroom suites
  • fixed flooring
  • tiling
  • light fittings
  • fireplaces
  • and
  • fitted kitchens (excluding appliances).

You cannot claim relief on legal fees, other professional fees or Stamp Duty paid if you buy either:

  • a refurbished
  • or
  • a converted property. 

You can only include the Value-Added Tax (VAT) you have paid as part of the qualifying costs. Any VAT element already claimed cannot be claimed for this relief. If you complete the refurbishment or conversion work yourself, you cannot reclaim any VAT paid. 

Published: 05 April 2024 Print this page

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