Robbie Gallagher (Fianna Fail)
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Cuirim fáilte roimh an Aire Stáit chuig an Teach. A High Court decision last October ruled that a Valuation Tribunal subjecting Vision Ireland charity shop in Virginia, County Cavan, to commercial rates was incorrect in law. The judgment represented the conclusion of a legal challenge that began back in 2019 by Vision Ireland, then NCBI, which now has more than 120 charity shops nationwide. While the judgment currently applies to a single Vision Ireland charity retail store location, the charity's lawyers argue it set a significant precedent that many charity shops may follow, operating for charitable purposes across the country to obtain an exemption from commercial rates. It was argued successfully that retail activities conducted to fund the charitable purposes of the organisation should be exempt from commercial rates under the Valuation Act. Surely it is time the Government provided clarity for local authorities on this matter.

There are approximately 550 charity shops in Ireland, of which Vision Ireland operates 121. In 2024, Vision Ireland paid approximately €450,000 in commercial rates. It is estimated that the total amount of commercial rates collected from all charity shops annually is approximately €2.1 million, which is a tiny fraction of the approximate €1.5 billion in commercial rates received by local authorities annually. This cost takes funds directly away from charity shops providing services for blind and low-vision children and adults. The funds should instead be supporting the charitable purposes of the organisations operating charity shops for people with cancer, in wheelchairs and in hospices; the homeless; overseas aid; and animal welfare.

In County Monaghan, our local family resource centre, Teach na nDaoine, operates two social enterprises on a strict not-for-profit basis, meaning all proceeds go directly towards charitable causes, rather than private gain. I commend Packie Kelly and his team on the fantastic work they do in Teach na nDaoine. They support vital community services while promoting sustainability through the circular economy. Given their charitable status and contribution to social and environmental well-being, they feel it is reasonable and beneficial to exempt them from commercial rates.

Many charity shops rely heavily on volunteers reducing operational costs and providing meaningful opportunities for community engagement. Revenue generated from sales directly supports local and national charitable activities such as homelessness relief, mental health supports, healthcare initiatives and social inclusion programmes. Every euro spent is invested in essential services for vulnerable communities.

Another relevant factor is that charity shops are key players in the circular economy, which focuses on reducing waste, extending the life cycle of products and minimising environmental harm. By providing a second life to these items, these shops significantly reduce carbon footprints associated with new production and disposal. Teach na nDaoine's upcycling hub estimated it had diverted 40 tonnes of textile, furniture and household goods from landfill last year alone.Charity shops offer low-cost clothing, furniture and household essentials to individuals and families who might otherwise struggle to afford them. These charity shops happen to pay rates to the local authorities when those funds could be going to those in most need of them. I hope the Government is aware of this court decision and that it will eventually move on down to all charity shops, which should be exempt or, at the very least, pay minimal rates compared with what they pay currently.

John Cummins (Waterford, Fine Gael)
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I thank Senator Gallagher for raising this question, which gives me the opportunity to discuss the commercial rates position regarding registered charities and charity shops. As the Senator will be aware, Tailte Éireann is an independent Government agency under the aegis of the Department of Housing, Local Government and Heritage. Tailte Éireann provides a property registration system, a valuation service and a national mapping and surveying infrastructure for the State. Tailte Éireann is independent in the exercise of its valuation functions under the Valuation Act 2001, as amended, and the Minister for Housing, Local Government and Heritage has no function in regard to decisions made by the body.

The Valuation Act 2001, as amended, provides that a property is rateable until it is expressly exempted. Schedule 4 of the Act of 2001 lists the categories of property which are not liable for commercial rates. Paragraph 16 of Schedule 4 provides that a charitable organisation that uses a property exclusively for charitable purposes other than for private profit is exempt from the payment of rates. However, the question of the rateability or otherwise of individual charity shops would need to be considered on the basis of the particular circumstances of the case and how the provisions of the Act apply in that specific case. Generally, shops operated by charitable organisations are rateable on the basis that the retail activity conducted therein is deemed not to be of a charitable purpose within the meaning of the legislation. As a matter of course, Tailte Éireann examines all properties on their individual merits by reference to the relevant statutory provisions governing the operation of the Valuation Act 2001, as amended. It is understood from Tailte Éireann that the long-held position is that charity shops, as retail units, are rateable; that is, while the occupier of the retail unit may be a charitable organisation, the activity of retailing itself is not a charitable purpose.

There are a number of avenues of redress for an occupier of a rateable property who is dissatisfied with the determination of the valuation by Tailte Éireann made under the provisions of the Valuation Act 2001, as amended. First, before a determination is made, there is a right to make a representation to Tailte Éireann in relation to a proposed valuation. Later in the process, if the occupier is still dissatisfied with the determination, there is a right of appeal to the Valuation Tribunal, which is an independent body set up for the purpose of hearing appeals against determinations of Tailte Éireann. There is also a right of appeal to the higher courts on a point of law.

While I do not want to discuss the individual case that the Senator has referenced, the position as set out is the position that has been the case heretofore. I appreciate the points the Senator has made in his contribution and the value that organisations like Vision Ireland bring to the people they support and serve. I thank the Senator for raising the matter.

Robbie Gallagher (Fianna Fail)
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I thank the Minister of State for his comprehensive response, although it might not be what I wanted to hear. While I appreciate the Minister of State may not want to say too much about the court case, the court did make a finding in that regard and I wonder what the knock-on effects will be for other charitable organisations. Without going into the legalities of it, fairness should come in here. Charity shops are paying commercial rates to the local authorities in question. The losers here are those who would benefit from those funds and, generally speaking, they are the people who are in most need of them. When will the Department get the chance to digest the conclusions of that court case? It may have implications going forward. I sincerely hope that will be the case.

John Cummins (Waterford, Fine Gael)
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I thank the Senator again. His points are very well made. As I said, the issue of charities in and of themselves is not in question here. It is about the activity carried out within the commercial premises. The long-held position has been that retailing does not exempt a charity from rates. I appreciate the point the Senator has made and will engage with officials on this.