Prime Minister Dr. the Most Hon. Andrew Holness in his 2026/2027 Budget Presentation on Thursday March 19, 2026, revealed a comprehensive new Urban Renewal framework aimed at transforming Jamaica’s blighted and underutilised urban spaces.

The proposed framework directly addresses long standing issues in land utilisation across key urban centres, including sections of Downtown and Central Kingston, Spanish Town, and Montego Bay, where vacant lots and derelict buildings occupy land located close to infrastructure, employment, and public services.

While these areas remain among the country’s most well situated, outdated incentives and administrative inefficiencies have constrained redevelopment.

The Prime Minister disclosed that since 1995, the Urban Renewal Tax Relief Act has sought to encourage investment in designated areas, however, only 56 projects have been approved over nearly three decades.

“Last year, I indicated that we would overhaul this framework to make it truly fit for purpose, and that work, led by the Urban Development Corporation (UDC) with key stakeholders, is now well advanced,” the Prime Minister stated.

Central to the framework is a strengthening of existing tax incentives. Developers undertaking approved urban renewal projects will be able to apply tax credits against up to 100 per cent of their income tax liability, an improvement on the current 50 per cent cap.

For priority developments, including projects in severely blighted areas, affordable housing initiatives, and critical public facilities, the tax credit rate will increase from 33.3 per cent to 40 per cent, improving project viability and accelerating delivery. Additionally, unused tax credits will become fully transferable, allowing them to move with the property on sale, which will remove a major barrier to investment.

The framework also introduces measures to strengthen the wider development ecosystem:

• Tax exempt interest income of up to eight years for financing associated with approved projects
• Commercial rent deductibility of 200 per cent for tenants operating within designated developments
• Property tax exemption in the first year for first time purchasers of residential units in approved projects

To address chronic delays in approvals, the framework provides for all permits, development approvals, and tax authorisations to be processed through a single digital portal managed by the UDC, which is expected to significantly reduce processing times.

The Urban Renewal programme will be expanded beyond Downtown Kingston to include sections of Central Kingston, St. Catherine, St. James, Portland and St. Thomas. The framework will also include disaster recovery and reconstruction zones, covering affected areas in St. Elizabeth, Westmoreland, Hanover and Trelawny.

While some technical and legislative work remains outstanding, the new Urban Renewal framework is targeted to begin coming into effect in the first quarter of FY2026/2027.

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