Mr. Patrick Davitt:

It is important to say that there have been no tribunal cases yet under the Valuation (Amendment) Act. However, we believe that parties that go to the tribunal will not be able to argue on the basis of the rent of their premises. They will only be able to argue on the basis of tone. The tone of the valuation sounds very tricky and very difficult to understand. It is made up on the basis of valuation averages.

We might imagine four properties for instance, with two at a high rental value and two at a low rental value. The Valuation Office will try to pick a value in the middle. However, no matter how it picks it, the owner of a property with low rental value is going to have a high valuation and a high rate. Conversely, owners with higher rental value, will get a fall in the rates. Hence we say that the Valuation Office takes from one to give to the other. However, there have been no tribunal hearings yet. It will be interesting to see what happens. We fear that when the hearings start, this is exactly what is going to happen. A property owner will not be able to argue that his rates are X and his rent is Y, and seek to link them. The issue turns on the tone of the valuation, which does not seem very fair.

The Senator also referred to rural Ireland. Rates in themselves have a huge effect on rural Ireland and its business holders and shop-owners. They have to pay the rates, and must raise that money through rents or otherwise. If the rates increase, it will put those people at risk of going out of business. That is a huge problem for small business owners, and especially for some of our members, who are small business owners throughout the country. If in 2006 a house cost €300,000, and in 2012 or 2013 it cost €150,000 or even €50,000, fees will obviously fall considerably. That leaves these people earning a lot less in fees. However, the whole valuation figure of €1.5 billion sought by the Government has not changed, even though these businesses' fee income has down drastically. This could close a lot of businesses in rural Ireland.

Moreover, there may be a new provision whereby an owner cannot claim that their property is not rented. If that comes in, people will have to pay rates whether their property is rented or not. It seems very unfair, and I plead with the Minister not to bring this in, because rural Ireland faces a very different situation. We took a survey in one small town, Strokestown, where 17 properties are vacant at the moment. If that abatement comes in, the owners of those properties will have to pay rates for those properties, as if they were rented. How are people going to pay for it? In some instances, the value of those properties has gone from €250,000 to €30,000. It is incredible.

This morning I was speaking at a banking meeting, and I saw two properties on the Internet that were sold at auction during the week. They were two-bedroom apartments that made €25,000 each in one of these towns. They were bought in order to be rented. We hear of the high prices for properties and that may be true in Dublin or the big cities, but in rural Ireland it is a different kettle of fish. There are many people in rural Ireland who have problems with banks and loans, and they have not been dealt with at all. There are people whose businesses have had a loan outstanding for years. They cannot pay it back and it does not look like they will be able to do so, because at the end of the day they are not making enough money. It is practically impossible to get a settlement with the bank or even to speak to somebody there. It is still the same today. From a business-owner's point of view, and certainly from that of many of our members, something will have to happen. The banks must be contactable by these people. They must sort out their loans and come to some sort of arrangement with these business owners, or a lot of them are going to go out of business.