Seanad debates

Thursday, 28 January 2016

Commencement Matters

Commercial Rates Impact

10:30 am

Photo of Damien EnglishDamien English (Meath West, Fine Gael) | Oireachtas source

On behalf of the Minister for Justice and Equality, Deputy Frances Fitzgerald, I thank the Senator for raising this important issue. I should point out that the ministerial responsibility for the Valuation Office has been transferred to the Minister for Justice and Equality, with effect from 1 January 2016. I might also explain that the issue of local authority commercial rates comes within the remit of the Minister for Public Expenditure and Reform, who has responsibility for fiscal policy, and the Minister for the Environment, Community and Local Government, who has responsibility for the local government system.

The Valuation Office, which now comes under the remit of the Minister for Justice and Equality, is responsible for the implementation and interpretation of the Valuation Act 2001, as amended, under which commercial rates are levied by the local authorities. The Valuation Office prepares valuation lists of commercial properties, as required by the Valuation Act, and local authorities are obliged to collect rates on properties which are listed. The Commissioner of Valuation is independent in the exercise of his functions under the Valuation Act 2001 and the making of valuations for rating purposes is his sole prerogative. The statute does not accord the Minister any function in this regard.

The Valuation Act 2001, as amended by the Valuation (Amendment) Act 2015, provides that all buildings used or developed for any purpose are rateable unless expressly exempted under Schedule 4 of the Act. Such exempt buildings would principally include those used for public worship, education and healthcare provided on a not-for-profit basis and charitable purposes. In general, the Act maintains the long-standing position that all commercial properties, including all commercial child care facilities such as playschools, preschools, crèchesand Montessori schools, are liable for rates.Inconsistency in the approach to the exemption from rates for child care and educational facilities and calls to exempt all such providers were among the issues raised at a number of stages during the passage of the Valuation (Amendment) Act 2015. As a result, the Government approved a Seanad Report Stage amendment to the Bill to insert into Schedule 4 to the Valuation Act 2001 an exemption from rates for properties occupied by parties that provided early childhood care and education on a not-for-profit basis. This is for community purposes, a matter to which the Senator referred. The amendment was proposed and passed on Report Stage in the Seanad on 20 November 2014. This extension of the child care and education exemption removed an anomaly by which facilities that provided child care and education on a charitable basis were exempt, while those that did so on a not-for-profit basis were not. Since the legislation was commenced on 8 June 2015, the Valuation Office has been updating the valuation list to give effect to this provision and the vast majority of such occupiers will qualify for this relief from 2016 onwards.

I thank the Senator for raising this important issue. The decision taken by the Government to extend the rates exemption to early childhood care and education provided on a not-for-profit basis was taken having considered the views of stakeholders in the sector and Members of this House. In addition to the exemption of those that provide child care and early education on a not-for-profit basis, the Valuation Office's interpretation of paragraph 10 of Schedule 4 to the Valuation Act 2001 means that those that provide only the early childhood care and education scheme are also exempt from rates.

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