Tom Fleming (Kerry South, Independent)
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Question 8: To ask the Minister for Finance if he will request the Valuation Office to revisit the issue of rates on commercial properties as it is having a devastating affect on jobs and small business in the Country. [13072/11]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware the levying of commercial rates is a matter for local authorities. The role of the Valuation office is to value all commercial properties for the purposes of the calculation of rates by the local authorities. The valuation of a property is multiplied by the annual rate on valuation, set by the local authority, to give the amount of commercial rates payable per annum. The Valuation Act, 2001 which came into effect on 2nd May, 2002, provides that all buildings used or developed for any purpose including constructions affixed thereto are rateable unless expressly exempted under Schedule 4 of the Act. Such exempt buildings would principally include those used for public worship, education and health care provided on a not-for-profit basis, and charitable purposes.

The basis of valuation for all commercial property, including small businesses, is net annual value, i.e. the rental value of the property. Valuation revisions set for modified or new properties are determined by reference to the values of comparable properties on the same valuation list.

The legislation also provides for the revaluation of all commercial and industrial property in the State and the Commissioner of Valuation, who has sole responsibility for all valuation matters under the Act, is implementing the revaluation programme on a nationwide basis. The purpose of revaluation is to bring more equity, fairness and transparency into the local authority rating system. I am satisfied that, following completion of the programme, there will be a much closer and uniform relationship between rental values of property and their commercial rates liability and that this relationship will thereafter be maintained by means of recurring revaluations provided for in the Act.

Under the 2001 Act, the commercial rates income of the local authority will be capped in the year following a revaluation. Any increase will be limited to the rate of inflation. The purpose of revaluation is to redistribute the commercial rates liability more equitably between ratepayers rather than to increase the total amount of commercial rates collected by a local authority.

The revaluation programme began in November 2005 in the South Dublin County Council area and has since been rolled out to the areas covered by Fingal and Dún Laoghaire-Rathdown County Councils. The revaluation of South Dublin was completed in December 2007, Fingal was completed in 2009 and Dún Laoghaire-Rathdown was completed in 2010. In the next phase, the revaluation of the Dublin City Council area commenced with the signing of the Valuation Order on 5th May, 2011. This will entail the valuation of circa 25,000 properties and the new list will be published in December 2013. It is intended to roll out the programme to further local authority areas later in 2011 and the necessary process of consultation, as provided for under the Act, is underway with local authorities of Waterford, i.e. Waterford City and County Council and Dungarvan Town Council. Preliminary work is also underway on the revaluation of Limerick City.

The Commissioner is actively reviewing options which might hold potential for accelerating the delivery of the revaluation programme within a shorter timeframe. While I have no immediate plans to amend the Valuation Act, 2001, my officials are reviewing various provisions of the Act to achieve greater efficiencies, including streamlining the appeals process. I should emphasise again that while the list of rateable valuations produced and maintained by the Valuation Office are the basis on which rates are levied, the amount of rates to be collected is a matter for each local authority to decide.