John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

Deputy Cassells is right. There is not a Member of the House, be he or she in government or anywhere else, who does not get many queries from constituents on this issue, particularly in local authority areas that have undergone the revaluation process. The Deputy is right to point out the number of appeals and the delays in same. We have a responsibility to ensure that commercial rates bring €1.4 billion into the local authority sector. Were that figure adjusted downward significantly, it would have serious consequences for our local government system.

It is my intention in the autumn to deal specifically with the valuation side of this process. As practitioners, we all know that rates and valuations are two sides of the same coin. The Commissioner of Valuation operates independently of the Government and every elected politician, local and national. That is important, as the job the commissioner must do should be completely independent of politics. Equally, however, the Oireachtas has a responsibility to review from time to time the legislation underpinning the valuations process. That is why I am determined to do so in the autumn of this year. I will not use the word "anomalies", but there are a number of pinch points in certain sectors of the economy, particularly in small rural communities and villages where there is only a business or two that, in effect, can often act as a social service as much as commercial operations.

Other arms of Government - for example, the Minister, Deputy Ring's Department and the local government section - are constantly trying to do their utmost to improve the quality of life for people in these communities throughout the country and sometimes it can seem that commercial rate provisions do not have the same interests at heart, and they do not. There is a conflict there. The rating system is designed to ensure a level playing field or an even system is operated across the country in the way we collect commercial rates. Equally, with respect not only to isolated rural areas but to some of the more deprived urban centres in towns and cities across the country where smaller business premises have closed in recent years, there is a desire, politically, across all sides for those local businesses to be retained and to ensure that valuation rules or anything around them would not be a contributory factor to the closure of such business. In the autumn of this year it is very much my intention that we would bring forward legislation on valuations.

To answer specifically the amendment in the name of Deputy Darragh O'Brien proposed by Deputy Cassells, the Valuation Acts provide for the revaluation of all rateable property within a rating authority area so as to reflect changes in value due to economic factors such as business turnover, differential movements in property values or other external factors and changes in the local business environment. The Department has been informed that the general outcome of the revaluations conducted to date by the Valuation Office is that approximately 60% of ratepayers have had their liability reduced following a revaluation and 40% have had their liability increased, which is expected to be replicated elsewhere as the national programme advances.

With respect to reported cases where the rates liability has increased by multiples of the original bill, the Department has been informed that while such increases may have occurred in some isolated cases, increases of this level would be a rarity. Possible reasons for significant increases where they occur would be that the valuation of some of these properties had not been revised to take account of improvement, extensions, etc., for some considerable time or where the valuations were historically low in comparison to the general level of valuations on the valuation list.

Additionally, some properties may have undergone extensive refurbishment and this was not reflected in the valuation immediately before the revaluation that is now in train. It is not the purpose of a revaluation to increase the total amount of commercial rates collected by the local authorities. Section 56 of the Valuation Acts 2001 to 2015 provides that the Minister for Housing, Planning and Local Government having obtained the consent of the Minister for Public Expenditure and Reform is obliged to make an order directing a rating authority to limit the overall amount of income it could raise through rates in the year following a revaluation to the total amount of rates liable to be paid in the previous year, plus buoyancy arising from valuations determined in the year of a revaluation of newly constructed property and adjusted for inflation as measured by the consumer price index, CPI.

Rate limitation orders have been made in each local authority that has undergone a revaluation to date and further orders will be made in respect of future revaluations as they arise. Ultimately, any undue or contrived delay in achieving up to date valuations in line with current property rental values would result in unfairness in the levelling of rates. A proposal to phase in increases in valuations over a number of years would either see the shortfall in rates income being made up by other ratepayers in the form of higher rates bills or would be absorbed by the local authorities. In light of that, it is not my intention to accept this amendment.

We will have to examine in some detail the valuations system in the fall of this year. There is already a review of some of the exemptions that currently exist under the Valuation Acts under way, to which I would have referred in a few of my responses to parliamentary questions. We, as an Oireachtas, should ensure we have legislation in place to take on board that review. I believe we can do that in the fall of this year. It need not necessarily be major legislation but it could deal some of the issues Deputy Darragh O'Brien's amendment seeks to address, which is to avoid a situation where there can be severe increases on individuals. Sometimes there can be a significant delay in the hearing of appeals and the process of revaluation is a little slower than we would like. In that proposed legislation we should be able to address some of those concerns.