Dinny McGinley (Donegal South West, Fine Gael)

We might get a footnote in history yet.

I thank the Deputy for raising this matter, which is of interest to so many businesses and commercial interests in every part of the country. 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. The annual rate on valuation which is applied to the valuation of each property, determined by the Valuation Office, to obtain the amount payable in rates, is decided by the elected members of each local authority in the annual budget and its determination is a reserved function of a local authority. Rates income is a very important contribution to the cost of services provided by local authorities such as roads, water, public lighting, development control, parks and open spaces.

The factors that influence the decision on the annual rate on valuation include the level of services to be provided by the local authority and the income available to fund these services. The elected members therefore adopt the annual rate on valuation they consider necessary in order to provide the range of services for the communities, including businesses, in their area. In this regard, all rates collected locally are spent exclusively on providing services within that area. This is local democracy in action.

The Government is acutely aware of the pressures on small and medium-sized businesses and the challenging economic environment in which many property and business owners are operating at the present time. Local authorities have responded positively to requests to them by the Minister for the Environment, Community and Local Government to exercise restraint in setting commercial rates to support competitiveness in the economy and to protect the interests of communities. The annual rates on valuation have been reduced by an average of 0.6% in 2010 and by a similar level in 2011.

It is recognised that these are difficult economic times for many businesses and the Minister for the Environment, Community and Local Government, Deputy Hogan, will continue to keep the approach to rates by local authorities under active review. The Commissioner of Valuation, who has sole responsibility for all valuation matters, is conducting a programme of revaluation of all commercial and industrial properties throughout the State. To date revaluations have been completed in the South Dublin, Fingal and Dún Laoghaire-Rathdown County Council areas. A revaluation is currently under way in the Dublin City Council area. It is intended to roll out the programme to further local authority areas later this year.

Following completion of the revaluation programme, there will be a much closer and uniform relationship between rental values of property and their commercial rates liability and this relationship will thereafter be maintained by means of recurring revaluations provided for in the Valuation Act. In this way, the revaluation process will lead to more consistent and up-to-date valuations for rating purposes and will assist in making the rating system fairer and equitable for ratepayers. I understand that the Commissioner of Valuation is actively reviewing options which might facilitate the delivery of the revaluation programme within a shorter timeframe.

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