Taxes Consolidation Act 1997 section 361

Rented residential accommodation: deduction for certain expenditure on construction

Section 361 provides for a deduction against rental income for construction expenditure on qualifying residential accommodation located on designated Irish offshore islands.

• Relief is available for houses on 23 designated islands off Cork, Donegal, Galway, Limerick, Mayo and Sligo, used solely as dwellings within set floor area limits and let under a qualifying lease of at least 12 months.
• Qualifying construction expenditure is deducted in computing the Case V rental surplus or deficiency from the premises and treated as a deduction authorised by section 97(2).
• A 10-year relevant period applies, with a clawback (the deduction is treated as rent received) if the house ceases to be qualifying or the lessor's interest passes during that period.
• A purchaser of an unused newly constructed house can claim the relief themselves, based on the relevant price paid on the purchase.