Denis O'Donovan (Fianna Fail)
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Cuirim fáilte roimh an Aire Stáit.

Martin Conway (Fine Gael)
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I welcome the Minister of State, Deputy Catherine Byrne. I am delighted she is here to respond to me on behalf of the Minister for Housing, Planning, Community and Local Government. As a representative of an urban area, I am sure she will understand the various challenges that arise when successful businesses that want to get bigger decide to purchase greenfield sites to develop large out-of-town shopping centres and retail outlets. One such challenge develops when the premises from which such businesses previously operated are left empty. While these vacant facilities are available for leasing and renting, the terms and conditions involved, including the requirements and duration of the lease, make it impractical for anyone to promote a realistic business opportunity at such premises.

I know this used to be a major issue in Dublin and other cities when successful retail outlets, especially supermarkets, that were leaving sites vacant were able to claim a 100% rebate on their rates each year. The way it used to work was that a company with one of these units would pay rates on that unit on 31 December each year, before claiming those moneys back on 1 January of the following year by demonstrating that the unit was available for renting to a suitable client who could meet strict terms and conditions. To deal with this problem in Dublin and other big cities, it was decided to introduce legislation limit to 50% the rebate such companies could get on their rates. They paid 50% and got a discount of 50%. I want this legislation to be extended to all urban areas in order that it covers towns like Ennis in County Clare and Tralee in County Kerry.

A large unit in Tralee town centre from which Dunnes Stores traded successfully for many years is now empty. The company was so successful in the town that it decided to build a big out-of-town unit on a greenfield site. As a consequence, its former unit in Tralee town centre has been empty for some time. The existence of this vacant unit in the centre of Tralee is choking development in the area. It is fair and reasonable to expect a successful company like Dunnes Stores to make a contribution towards the rates bill for what I would describe as a derelict site.There has been no effort whatsoever made to rent it out, either as small units or to an alternative business. The particular example in Tralee is replicated in towns all over the country. I have huge sympathy for somebody who goes out of business and is having difficulty in renting a unit, given that it may require significant investment to bring it up to an acceptable standard and the particular client may not have money to do so. However, it is a different ball game when there is a major company with significant profits which is in a position to prevent this from happening. It is a reasonable request that legislation be introduced to extend the 50% rebate across the country.

Catherine Byrne (Dublin South Central, Fine Gael)
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I thank the Senator for raising this matter. Unfortunately, the Minister, Deputy Simon Coveney, is before the Select Committee on Housing, Planning, Community and Local Government and I will be taking this matter on his behalf.

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 pursuant to the Valuation Acts 2001 to 2015. The Local Government Act 1946 provides that where a property is unoccupied on the date of the making of the rate, the owner becomes liable for rates. However, the owner may be entitled to a refund if the property is vacant for specified purposes, the specified purposes being as follows: if the premises are unoccupied for the purpose of making additions, alterations or repairs; where the owner is bona fide unable to obtain a suitable tenant at a reasonable rent and where the premises are vacant pending redevelopment. The collection of rates and the determination of eligibility for a refund in this context are matters for each individual local authority. The Local Government Act 1946 provided that the owner was entitled to a 100% refund in most local authority areas. Separate legislation governed refunds in the cities of Dublin, Limerick and Cork where the same criteria for refunds applied, but only 50% of the rates paid were refundable.

With effect from 1 June 2014, when the relevant provision commenced, the Local Government Reform Act 2014 gives discretion to the elected members of individual local authorities to vary the levels of rates refunds that apply in individual local electoral areas within the authority’s administrative area. The Local Government (Financial and Audit Procedures) Regulations 2014 provide that the decision to alter the rate of refund should be taken at the annual budget meeting and that the rate of refund decided in respect of the relevant local electoral area shall apply to eligible persons for the year to which the budget relates. The absence of a decision to vary the refund means that the existing legislative provisions regarding the rate of refunds apply, that is, either 100% or 50%, as set out.

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. The Minister will shortly be bringing proposals to the Government to modernise the legislation governing the levying and collection of commercial rates. The proposals will include measures for the elected members of a local authority to determine, as part of the annual budget process, the level of abatement from rates where a property is vacant. The Minister envisages that the new legislation will be brought before the Houses later in 2017.

Denis O'Donovan (Fianna Fail)
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That sounds like good news for the Senator.

Martin Conway (Fine Gael)
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Absolutely. To be fair to the Minister, he is reflecting on the situation. I do not think any fair-minded person would expect somebody who is struggling and may not have the resources to bring a particular building up to standard to have a punitive rates bill for a building that is not generating any return. The particular situation about which I am concerned involves a business which has been relocated and is thriving and leaves what I would describe as a ghost property in the centre of a town. The legislation the Minister envisages bringing before the Cabinet this year will I hope reflect the particular anomaly. I thank the Minister of State for her very positive response.