Thursday, 6 April 2017
Ceisteanna - Questions - Priority Questions
3. To ask the Minister for Housing, Planning, Community and Local Government his plans for reforming the commercial rates and valuations system in local authorities; the details of progress being made on the rates alleviation measures mentioned in the rural action plan. [17419/17]
I ask the Minister to outline his plans to reform the commercial rates and the valuation system in local authorities, the details of the progress being made and the rates and alleviation measures mentioned in the rural action plan.
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 Acts 2001 to 2015. The Commissioner of Valuation has responsibility for valuation matters. The levying and collection of rates are matters for each individual local authority. Commercial rates form an important element of the funding of all local authorities. However, the legislative basis for the levying of rates is spread over a number of enactments, some dating back to the 19th century. Many of the provisions are outdated and not suitable for business trends in the modern era. I have asked my Department to develop proposals for the preparation of a consolidated rates Bill to modernise and consolidate the legislation in this area. Among the measures being addressed in the general scheme of the Bill are provisions to allow a local authority to introduce rates alleviation schemes, which would include schemes to support the implementation of Realising Our Rural Potential: The Action Plan for Rural Development. My Department's work on the general scheme of the Bill is at an advanced stage and I hope to bring it to Government shortly.
I hope we will bring the Bill to the Government before the end of the month. We will see significant changes in a whole series of areas in terms of how rates can be managed by local authorities. That will involve devolution of more power to local authorities and improved approaches to the collection of rates to make sure we have a level playing field for businesses that are competing with each other, and a whole series of other provisions as well that will modernise the legislation on rates.
The Valuation Office is not in my Department - it is in the Department of Justice and Equality - but responsibility in terms of the collection of rates and the role of local authorities in that regard is very much part of my Department's remit. We will update and modernise legislation in that respect and the Deputy will see the content probably in the next three weeks.
I thank the Minister for his response. I have a certain interest in the matter, and as a rate payer myself I have an understanding of it. It must be the most archaic form of tax in terms of the way it is calculated. It is not fit for the modern world we live in.
One specific aspect of commercial rates and the revaluation that is taking place in a number of counties around the country currently is that the impact it will have on them at the end of the fiscal year can be frightening because some properties have not been revalued for up to 30 or 40 years and could face a significant increase in their rates bill in a one-year period. When one takes the total net effect of valuation for the county and the annual rate of valuation, there will be a significant increase in rates. Is there any way the Minister could harmonise the revaluation process over a period, for example, five years, similar to the harmonisation process currently in train for county council and town council rates?
A harmonisation process is under way. It is happening on a county-by-county basis. The Valuation Office is carrying out the work. Some counties are still two years' away from the process while others have had it carried out. I think the revaluation process is currently being carried out in County Kildare. Any time there are rates revaluations, it causes quite a lot of strife because some businesses win and others lose. I accept revaluation is a difficult process for some businesses as I have been contacted by some of them. That said, if we are serious about modernising how the rates base is calculated and doing it in a way that is consistent, we must address inaccuracies that might have built up over time. That is what the revaluation process is all about. Businesses that feel they are being harshly or unfairly treated should avail of the appeals process that is available to them. The Valuation Office does need to be independent. It is not even in my Department. I accept the appeals process is in place for good reason and businesses who feel they are getting unfair treatment should make their case.
I thank the Minister for his reply. We all know the importance of businesses especially in towns and villages and how hard hit they are in terms of commercial rates at a time when we are trying to revitalise local businesses. The Minister mentioned the flexibility within the commercial rates system is very archaic. Even if local authorities wish to incentivise businesses to set up in towns, they find it incredibly difficult to do so because the legislation does not allow it.
Many counties offer 100% relief if a property is vacant. Any incentive I have been trying to promote that gives rates for free involves no cost to a local authority given the existence of the 100% relief on vacant properties as it was not in receipt of income on such properties. We could introduce a few key measures that would involve no cost to local authorities. Another incentive could be a discount for advance payments or direct debits as, due to the current archaic system, one must pay one's bill before one can get a refund. That shows the entire system is archaic and not fit for purpose currently.
It is. That is why we need a new Bill. Vacant properties and the rates that should apply to them are dealt with in the Bill. We will have an opportunity to tease it out in the committee. I will happily take on sensible suggestions in order to get the legislation right. I hope we will be able to start the process soon. I will bring the Bill to Government and I presume it will then go for pre-legislative scrutiny in the committee and we can tease out the detail of it.
A Leas-Cheann Comhairle, I do not know whether it is possible to go back and accept Deputy Ó Broin's question.