Barchester, the nursing home company backed by billionaires John Magnier, JP McManus and Dermot Desmond, has emerged as one of the budget's biggest losers after the abolition of tax breaks for nursing homes and private hospitals.
The company had planned to open 20 new nursing homes here by 2013, but it is now unclear how many of these developments will go ahead after the abolition of the incentives.
The Sunday Tribune understands that a substantial number of the projects were already in doubt due to the sharp deterioration in the Irish economy over the past 12 months.
A Barchester spokesman said the company was unsure what impact the removal of the tax breaks would have on its business, but it was proceeding with two current nursing home developments.
The chief executive of Nursing Homes Ireland, Tadhg Daly, said removal of the tax breaks was a prudent move as there was an oversupply of nursing home beds in some parts of the country.
"It may impact significantly on new builds but the full extent remains unclear until the Finance Bill and the transitional arrangements for current developments are published," he said.
But Pat Nolan, a property consultant to the healthcare sector, said nursing home developments remained viable because of dramatic falls in land and building costs over the past year.
"Previously, the tax reliefs were necessary during the property boom to make nursing homes viable compared to other forms of development such as residential but that isn't an issue now," he said.
Meanwhile, Department of Health officials have reassured developers who have signed deals to build co-located hospitals that their tax breaks will be preserved under the transitional arrangements.
But considerable uncertainty surrounds projects where the tendering process has not yet been completed such as the planned co-located hospital on the site of Tallaght Hospital in Dublin.
While Beacon Medical Group and the Synchrony consortium, which is backed by Boundary Capital, have been chosen as preferred bidders, tendering for the project has yet to start.
The Department of Health was unable to answer questions about the future tax treatment of that project and government sources said the transitional arrangements remained to be finalised.