A programme of tax incentives for Ireland's six cities has been formally launched with the aim of bringing life back to the country's historic city centres.

The Living City Initiative will offer income tax deductions to people carrying out refurbishment of homes and retail spaces in "special regeneration areas" of the historic centres of six Irish cities – Dublin, Cork, Limerick, Galway, Waterford and Kilkenny.

The scheme is aimed at bringing life back to Ireland’s city centres, according to Environment Minister Alan Kelly. Mr Kelly said the plan is “able to use the space that’s available within city centres and within those areas ... to bring life back to many areas (and) to ensure a better standard of living.”

The Minister for Finance, Michael Noonan said the scheme is “a targeted initiative at areas which are most in need of attention”

The scheme is broken into two parts – residential and commercial. The residential element will offer an income tax deduction, over ten years, for qualifying expenditure on the refurbishment or conversion of a building for use as a dwelling. To qualify the building must be built before 1915 and be located in one of the Special Regeneration Areas in the city. The residential tax relief is only available to owner/occupiers - the residential element of the scheme not on offer to landlords.

The commercial side of the programme provides capital allowances over a seven-year period for works done refurbishing or converting a property “for the purpose of retailing goods or the provision of services within the State,” according to Mr Noonan.

The amount of tax relief available under the commercial element of the plan is effectively capped at €200,000 for any individual project.

Department of Finance infographic on the Living City scheme