Michael Healy-Rae (Kerry South, Independent)
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Question 182: To ask the Minister for Public Expenditure and Reform his view on whether there should be an amendment to the Evaluation Act 2001 to allow an employer to appeal a rates evaluation due to a change in economic circumstances; his further view on whether the fact that commercial rates have gone up 45% since 2000 is placing an unbearable burden on small businesses in particular. [30077/11]

Brendan Howlin (Wexford, Labour)
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The Valuation Act 2001 provides for the valuation of all commercial and industrial property and the Commissioner of Valuation is independent in the performance of his functions under the Act and the making of valuations for rating is his sole prerogative. Under the 2001 Act, the basis of valuation for all commercial property is net annual value, i.e. the rental value of the property.

To ensure equity and uniformity, valuation revisions which are set for modified or new properties are determined by references to the values of comparable properties on the same valuation list.

Under section 28(4) of the Act, a Revision Officer of the Commissioner may carry out a revision of valuation in relation to a particular property only if a material change of circumstances has occurred such as a new building, a change in value due to structural alterations of an existing building, total or partial demolition of a building or a sub-division or amalgamation of relevant property. The definition does not allow for a revision of valuation where the change in value is due to economic factors, differential movements in property values or other external factors such as roads or other infrastructural development in the vicinity of a property.

Revaluation is the mechanism whereby economic changes that take place in the property market are reflected in the valuation lists and in individual ratepayers' rates liabilities. The purpose of revaluation is to bring more equity, fairness and transparency to the local authority rating system. Ideally, occupiers of properties of similar value in the same rating area should have a similar rates liability and following revaluation, there will be a much closer relationship between rental value and commercial rates liability and this relationship will thereafter be maintained by means of recurring revaluations provided for in the Act.

My Department is reviewing various provisions of the Valuation Act 2001, including the appeal procedures, with a view to modernising and streamlining the valuation process in the interests of both the ratepayers and the local authorities. In conjunction with the Valuation Office and the Attorney General, preliminary Heads of Bill have been drafted which I hope to bring to Government shortly for approval.

As the Deputy is aware, the levying of commercial rates is a matter for local authorities and the amount of rates to be collected is a matter for each local authority to decide. Commercial rates provide the means by which local authorities can fund the services essential to communities, and therefore business, across the full range of local activities including roads, water and waste services, fire and emergency, libraries and a range of community, amenity and social activities.

The Government is acutely aware of the pressures on small and medium-sized businesses and the challenging economic environment in which many property and business owners are operating at the moment. In this context, the Government is focused on reducing the costs of doing business to support competitiveness and employment in the economy and to protect the interests of communities. Local authorities have responded positively to requests to exercise restraint in setting commercial rates. Annual rates on valuation have been reduced by an average of 0.6% in 2010 and by a similar level in 2011. My colleague, the Minister for the Environment, Community and Local Government will continue to keep all matters relating to rates under regular consideration.