Mary Upton (Dublin South Central, Labour)
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Question 163: To ask the Minister for Finance if he has had meetings with local authorities to encourage them to adhere to the valuation methods as introduced in the Valuation Act 2001; if his attention has been drawn to the fact that not introducing same has led to overpayments by the hotel sector, which is suffering from financial pressure; and if he will make a statement on the matter. [37373/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Valuation Act 2001 came into effect on 2 May 2002. Under the provisions of this Act, rateable valuations for all local authorities are determined by the Valuation Office. The local authorities have no role in determining the valuations of property for commercial rates purposes.

The basis of rateable valuation for all commercial property is net annual value (NAV) i.e. the rental value of the property. Like all commercial properties, the valuations of hotels are determined by reference to the values of comparable properties on the same valuation list.

The Valuation Act 2001 also provides for the revaluation of all commercial and industrial property in the State. The revaluation programme began in November 2005 in the South Dublin County Council area and has since been rolled out to Fingal and Dún Laoghaire-Rathdown County Councils. The revaluation of South Dublin was completed in December 2007. Fingal will be completed later this year and Dún Laoghaire-Rathdown will be completed in 2010. When this first phase of revaluation is finished, it is proposed to extend the programme nationwide. However, a decision on which local authorities are to be revalued in this next phase has yet to be finalised.

Once a local authority has been revalued, the Valuation Act provides for a subsequent revaluation not sooner than 5 but not later than 10 years. The Act also provides for the rates income of the local authority to be capped in the year following a revaluation. The purpose of revaluation is to bring more equity, fairness and transparency into the local authority rating system and to distribute the commercial rates liability more equitably between ratepayers. Following revaluation there generally will be a much closer and uniform relationship between rental values of property and their commercial rates liability.

In those local authorities where a revaluation has not yet taken place, properties will continue to be valued on the existing valuation lists by reference to the valuation levels prevailing on those lists as provided for in the Valuation Act 2001.