confusing sentence

"The cost of rebuilding was reduced by tax incentives, allowing 65 percent of total renovation costs to be used as tax breaks."
how would reducing tax incentives decrease cost of rebuilding?
and what does it mean the renovation costs can be used as tax breaks

Reply 1

ml.1612

A tax break is a deduction in your tax bill.
Sometimes, the government will allow you to claim deductions if you spend on certain things - these are usually called tax incentives.
There may have been a policy that lets you claim back some of the cost of the renovation, by reducing your tax bill.

So for the renovator, if they spent £100 on renovation, they'd be able to claim a tax break, reducing their tax bill by £65. So it's only really costing them £45 for £100 worth of renovation. In that sense, it's reducing the cost of renovation for them.

That's my take on it.

Reply 2

Euapp

Original post by daddy1324

I think that you have misunderstood the first phrase where it says that the cost of rebuilding was reduced by tax incentives NOT that the tax incentives were reduced.
By using certain materials, agreeing to certain build standards etc a percentage of the costs can be deducted from the tax bill which in this case amounted to the equivalent of 65% of the renovation costs.