The Government has decided to keep tax reliefs to encourage the construction of sheltered housing within the grounds of nursing homes, writes Mark Hennessy, Political Correspondent.
The future of the tax break had been in doubt after the Government commissioned a review from Indecon economic consultants. However, the review concluded that the tax reliefs had been "very effective", and Minister for Finance Brian Cowen has responded by amending the Finance Bill in order to retain them.
The reliefs, which were due to run out in July 2008, will continue until April 2010. The homes will have to stay as sheltered housing for 20 years, rather than the 15 years required up to now.
The scheme is expected to attract private investment totalling €40 million, and possibly substantially more, according to Indecon.
Half of the cost of the houses, which are to be built in blocks of 10 or more, can be written off against tax by private investors over seven years, or by 75 per cent if a company has made the investment.
The decision to change the Finance Bill was taken by Mr Cowen after he received Indecon's recommendations. The amendment was passed during the Bill's committee stage. The proposal had not been included in the Bill because Indecon's report had not been completed in time, the Minister told Labour's Joan Burton.
Last night, Ms Burton raised questions about the Minister's decision, given that the "rules" had changed, she said, as a result of the Government altering the way in which elderly people pay for their nursing home care.
Given the numbers likely to be in need of nursing care, and the State's greater involvement, investors were guaranteed that the houses would be fully rented out, she said.
However, Mr Cowen said that the tax break was justified because extra places to cope with Ireland's ageing population were urgently needed and the public system could not meet the demand on its own.
More than 50 nursing homes last year provided 1,000 stand-alone beds in on-site sheltered housing, built under tax break rules introduced in 2002 - a rise of 180 beds on 2005.
Owner-occupancy of the sheltered houses is not allowed. Residents have to show a medical condition proving that they need such accommodation before the owners can claim tax relief.