Derek Nolan (Galway West, Labour)
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This is quite a technical issue but I hope the Minister of State, Deputy Shortall, will bear with me. It concerns rate collection by Galway City Council, of which I was a member, and rebates given to owners of vacant properties. If there are vacant units in Dublin, Cork and Limerick, rates are charged but there is a 50% rebate - in other words, 50% rates are paid on vacant properties. In Galway and Waterford cities, the two other urban councils, a 100% rebate is given. That means there is a discrepancy between Dublin, Cork and Limerick and Galway and Waterford.

The city council in Galway still must provide services for those vacant buildings, maintain the roads and footpaths outside them and spend money on the upkeep of the area surrounding them. The effect on Galway City Council of the 100% rebate is financial in that the city loses out on approximately €1 million in rates revenue each year. As a former member of the city council for two years and as a member of the corporate policy group, €1 million would go a very long way in Galway city. Just this week €800,000 was granted by the Government under the jobs initiatives and it will upgrade eight road junctions and will provide a CCTV control unit, a greenway and a pedestrian way and major traffic movement incentives across the city. That is on a one off basis. Some €1 billion per annum by applying the legislation to Galway and other urban areas would go a long way.

The other benefit would be to other ratepayers in the city who would see their rates bill being shared not only with other businesses which are operating but with empty units. There would be a greater contribution to, and burden sharing of, the rates bill. It would also have the effect of increasing business activity. In Galway, some landlords keep rents high and do not let units because they want to ensure rents stay high. Forcing those empty units to pay rates would encourage the owners to let them at lower rents and it would have an impact on rents in the city in that it would bring them down. It would also bring more people into the city because more people would use the shops or businesses which would open and it would generate economic activity.

It is important to note that ratepayers in Galway city, businesses and the business community, are very much in the favour of the extension of this legislation and would like to see this change as soon as possible.

Galway is one of the gateway cities and is a regional capital but we are subject to different legislation from Cork, Dublin and Limerick. There is no reason that legislation should not be extended to the other two major urban areas, namely, Galway and Waterford. I understand why it might not apply to rural county councils because they have not suffered the same loss in terms of units closing down and they are dependent on the regional cities, the centres of business and activity, to generate business and they are commuter belts for those cities.

Will the Minister bring forward legislation to bring parity to Galway City Council and Waterford County Council? I have seen previous responses from the Department which acknowledge the discrepancy and the problem but state that it is not willing to bring forward legislation to solve the problem. At a time when resources and funding are scarce, if legislation could generate significant income for a city council or for any State or public authority, we should not shy away from introducing it as it would not cost very much. I ask that we resolve the funding issue, the discrepancy and the inactivity in the Galway city area and that legislation on this matter be brought forward as soon as possible.

Róisín Shortall (Dublin North West, Labour)
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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.