Róisín Shortall (Dublin North West, Labour)

I am taking this matter on behalf of my colleague, the Minister for the Environment, Community and Local Government, Deputy Hogan, and I thank Deputy Nolan for raising it.

Commercial rates income is a very important contribution to the cost of local services provided by local authorities such as roads, public lighting, development control, parks and open spaces. All commercial rates collected within a local authority area are spent exclusively in providing services in that area.

Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The levying and collection of rates are matters for each individual local authority.

Rates are a local property tax levied on the occupiers and, in some cases, the owners of fixed commercial properties. Under current legislation, the owner rather than the occupier may be liable for commercial rates if the property in question is unoccupied on the date of the making of the rate.

Sections 14 and 23 of the Local Government Act 1946 provide that where a property in a county council or urban area is unoccupied on the date of the making of the rate, the owner becomes liable for payment of rates. However, the owner is entitled to a 100% refund if the property is vacant for specified purposes. These are where the premises are unoccupied for the purpose of the execution of additions, alterations or repairs; where the owner is bona fideunable to obtain a suitable tenant at a reasonable rent; and where the premises are vacant pending redevelopment.

A small number of urban local authorities have historically had separate legal provision enabling a refund of 50% of rates on vacant properties. This separate legislation governs refunds in Dublin, Cork and Limerick - section 71 of the Local Government (Dublin) Act 1930; section 29 of the Limerick City Management Act 1934; and section 20 of the Cork City Management (Amendment) Act 1941, respectively. While the same criteria for refunds apply, 50% of the rates paid is refundable to the owner of vacant premises in these cities. No such separate provision exists for Galway or Waterford City Councils, meaning they are, as are the majority of local authorities, subject to the provisions of the 1946 Act. Any proposal to alter the existing rebate system would require legislative amendment on a nationwide basis.

The Minister is acutely aware of the pressures on small and medium-sized businesses and the challenging economic environment in which many property and business owners operate at present. In this context, the Government is focused on reducing the costs of doing business to support competitiveness and employment in the economy and to protect the interests of communities. A move to a standardised commercial rates rebate of 50% for vacant properties would not be in keeping with this focus and would add to the costs for relevant property owners who may be challenged economically as they seek suitable tenants for vacant commercial properties.

In view of this, it is not the intention of the Minister, Deputy Hogan, at this time to amend the current commercial rates legislation relating to the refund of rates for vacant commercial properties. He will, however, continue to keep the approach to rates by local authorities under active review and is determined that every avenue will be pursued to optimise efficiency and certain costs in the local government sector. I thank Deputy Nolan for raising the matter.

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