Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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Question 70: To ask the Minister for Finance if he will examine the status of commercial rates in the Dún Laoghaire-Rathdown local authority area, which are set at the valuation date of 30 September 2005, when property rental values were much higher than in the current economic climate, a situation which is placing undue financial pressure on ratepayers; and if he will make a statement on the matter. [6887/11]

Michael Noonan (Limerick City, Fine Gael)
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The Valuation Act 2001 which came into effect on 2 May, 2002 provides for the valuation of all commercial and industrial property in the State. I should point out that the Commissioner of Valuation is independent in the exercise of his duties under the Act and that I, as Minister for Finance, have no function in decisions in this regard. The recent revaluation of the Dun Laoghaire-Rathdown County Council rating authority area was undertaken after the required consultation by the Commissioner with both the Minister for the Environment, Heritage and Local Government and Dun Laoghaire-Rathdown County Council and the subsequent making by the Commissioner of the requisite Valuation Order in June 2008. The Valuation date was 30 September 2005, the same date as was used for the revaluations of South Dublin and Fingal. The new valuation list was published on 31 December 2010. By reference to this list, approximately 54% of ratepayers experienced a decreased rates liability, while 46% will have an increased rates liability.

As provided in the Act, and as advised to all ratepayers in the Dun Laoghaire-Rathdown area, there is provision for any ratepayer to formally appeal to the Commissioner of Valuation against the rateable valuation accorded his/her property in the valuation list published on 31 December, 2010. These appeals are now being considered by the Commissioner. If any ratepayer is still dissatisfied with their valuation, they can appeal to the independent Valuation Tribunal and, ultimately, to the Courts on a point of law. The purpose of a revaluation is not to increase the total amount of commercial rates collected by local authorities. The legislation (Valuation Act 2001 and the Local Government (Business Improvement Districts) Act 2006) provides that the commercial rates income of local authorities in the year following a revaluation will be capped. The only increase in the total rates income of a local authority permitted in the year following publication of the new valuation list is an increase to cover for the rate of inflation.

The choice of Valuation Date does not affect the overall commercial rates income of a local authority. The amount of rates payable on any property is the result of multiplying two variables: the Valuation, which is in line with rental values at the Valuation Date and the ARV- the annual rate on valuation, which is calculated by the local authority. Since the total amount of rates to be collected by the local authority is capped in the year after the revaluation takes place, the only movements are between the total amount of valuations and the ARV.

If the valuation date of 30 September 2005 was altered and, as a result, produced a lower total valuation overall, then the ARV would increase, so that the local authority receives the pre-determined amount of rates income in the year following the Revaluation. Likewise, if a different valuation date produced a higher total valuation overall, then the ARV would reduce to provide the local authority with the same pre-determined amount of rates income. Therefore, changing the date of valuation will not affect the overall amount of rates income received by a local authority in the year following Revaluation.

While individual increases or decreases in rates liability will inevitably be the result of a revaluation, such increases or decreases will reflect movements over time in the overall property market, and result in a fairer, more transparent rating system.