Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank Senators Quinn, Barrett and Keane, who I acknowledge feel strongly on this matter. At the outset, I accept it is the job of Members in Parliament to get into the nitty-gritty of legislation and I am pleased we are doing that but the overarching aim of the Bill is to modernise the valuation process and to speed it up. The enabling of outsourcing will be a really significant step forward in speeding things up and collectively, all Members are correct that it is taking too long to carry out revaluations. This is a significant bugbear of business people and indeed of the Government. While I do not wish to repeat myself, some of these issues are crossing over, in that there is a theme and a thread to the amendments tabled by Senator Quinn and for good reason. However, the current legislation, that is, the Valuation Act 2001, provides for the rate of valuations of all rateable properties within a rating authority to be reviewed periodically to reflect changes in value arising from economic factors. The resultant valuations are all published on the same date and become effective for rating purposes at the same time. As Members are aware, this process is called revaluation and as I have outlined, the legislation provides for the valuations to take place between five years and no later than ten years after the first revaluation has taken place. This model of revaluation cycles is common in jurisdictions with an annual property tax similar to rates. I have already outlined a separate process called revision.

The proposed amendment envisages a review of a valuation of an individual property arising from a change in economic circumstances that would not be in keeping with the principle of valuation in this and other jurisdictions in which provision is only made for changes in the value of the property arising from alterations to the property. I fear that any alternative would introduce significant volatility in the rating system. It is important to note this system yields the astonishing figure of €1.3 billion annually in funding to local authorities. The amendment could also delay further the national revaluation programme, would be challenging to implement and more than likely would result in the introduction of an economic valuation system no longer based on property valuations but that would be a type of audit of the economic business sector that would be totally unsuitable for application as the base for local government funding.

I accept that some Senators might put forward a compelling case for moving to such a model but I am outlining my view that it would be a significant shift from the purpose of a valuation model. It is imperative to maintain certainty and predictability for ratepayers, for local authorities trying to plan the provision of local services, as well as for other stakeholders between revaluations, which is a fundamental principle of the rating system. Fluctuations in the economic performance of a company or other entity in the occupation of a property would not be measurable in a real estate context and would prove almost impossible to implement in a fair and equitable way. The physical characteristics and features of a property are the only criteria that actually can be surveyed and quantified on a uniform basis in arriving at rates. This is also a fair point because if one gets into the profitability level, how does one compare a butcher's premises with that of a jeweller, rather than just looking at physical characteristics? The use of business values and buoyancy may be used for the assessment of other taxes, such as VAT and corporation tax, but not for a local valuation-based property tax.

Arising from what I see in my own constituency, I strongly believe we must get better at revaluing and doing so efficiently. The overarching aim of this Bill and the provision of outsourcing will arrive at that point. I contend that Members should allow the legislation to pass, the outsourcing to bed down and the process of revaluation to be examined. Members should then examine the timeframes, that is, the five to ten years, at another time. It is something that should be kept under review.