Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank the Deputy for the amendment. At revision, properties are valued by reference to the values of other properties in the same rating authority area. The values are based on the actual physical characteristics of the property at the time of valuation, but reflect the economic conditions at an earlier date. If all valuations in a local authority were decreased between revaluations as a result of economic circumstances, then the annual rate on valuation, commonly known as the multiplier or the rate in the pound, which is set annually by the elected members of that local authority, would have to increase in order to bring in the same amount of rates income. The converse would also be true where valuations increased.

Revaluation, not revision, is the appropriate statutory valuation mechanism to address such movements in the property market. Every revaluation values all properties in that local authority area by reference to the economic and other conditions on a specific valuation date. Those new valuations become effective for rates purposes at the same time. On the other hand, revision, as we have already discussed, deals with individual properties at different points in time. Accordingly, the effect of this amendment would result in the proliferation of anomalies and undermine the principles of equity and uniformity which are at the heart of this Bill.

As the committee will appreciate, the hallmarks of any taxation system are fairness, transparency and predictability. Changes in economic circumstances are taken into account during revaluation. If revision was to have regard to economic factors then a ratepayer whose property was being revised would be at an advantage or a disadvantage vis-à-visother ratepayers depending on the relative strength or weakness of the property market for that category of property at that time. This could be very unfavourable to particular groups of ratepayers. Not every property will qualify for a revision under the material change of circumstance condition. If one does happen to qualify and the revision valuation is done at a time of property market buoyancy, one would be paying a much higher rate than an identical property in the same local authority area. This could also happen in reverse. For those familiar with the system, this amendment could have a negative impact, for example, on a decision to expand a business. If the property market had risen since the last revaluation one would be put in a position of paying relatively higher rates than competitors until a further revaluation. The current system maintains that equity and uniformity of values between revaluations. The overriding principle is that the actual occupation of the physical structure is what is being valued, not the economic buoyancy or otherwise, for the business carried on within the building. I believe that much of this relates to the need for a system that carries out revaluations more quickly. This came up a lot in our Second Stage debate and it is at the heart of this Bill. The aspiration is to get every business onto a regular cycle of revaluations. This will ensure a greater correlation between a current valuation and the economic conditions under which it was set. Trying to bring economic conditions and economic buoyancy in during the intervening period really has an impact on stability. I know Deputy Fleming will not agree with me on this, but I believe there would be many unintended consequences for ratepayers.