Written answers

Tuesday, 16 April 2013

Department of Public Expenditure and Reform

Commercial Rates Calculations

Photo of Eoghan MurphyEoghan Murphy (Dublin South East, Fine Gael)
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To ask the Minister for Public Expenditure and Reform the way commercial rates are determined for units in surburban shopping centres. [16418/13]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The levying and collection of commercial rates is the responsibility of each local authority and the Valuation Office has no function in this regard. The basis of rateable valuation for all commercial property, including retail units in suburban shopping centres, is net annual value and is set out in Part 11 of the Valuation Act, 2001.

Net annual value is the rental for which one year with another, the building might, in its actual state, be reasonably expected to let from year to year, on the assumption that the probable average annual cost of repairs, insurance and other expenses (if any) that would be necessary to maintain the property in that state, and all rates and other taxes and charges (if any) payable by or under any enactment in respect of the property, are borne by the tenant of the property.

Various methodologies may be used in estimating the net annual value (NAV/rental value) of a building. The most common methodology used is direct comparison with other similar buildings in the same rating area. This is the method used to estimate the net annual value (NAV/rental value) of retail units in suburban shopping centres.

There are two provisions in the legislation governing the assessment of valuations, i.e. revision and revaluation.

Revision of valuation is the mechanism used to maintain existing local authority valuations lists. It is used to add new properties to the list, to amend the valuations of altered properties and to remove demolished or defunct properties from the list. The valuations of commercial properties at revision are determined by reference to the net annual values of comparable properties on the same valuation list. That is to say that they are compared with similar type properties in the same local authority area to ensure, in so far as it is possible, that they are all treated equally.

In a revaluation the entire commercial valuation list for a local authority is brought up-to-date by reference to values at a specific valuation date and the entire list is published on one date (usually 31 December) and comes into effect for rating purposes on 1 January the following year. To-date, revaluations of the commercial list have been completed in South Dublin, Fingal and Dun Laoghaire County Council areas and the revaluation programme for the Dublin City Council area is currently underway and is expected to be completed by 31st December, 2013.

The Commissioner of Valuation is responsible for the administration of the Valuation Act and is independent in the exercise of his duties under the act and I, as Minister for Public Expenditure and Reform, have no function in decisions in this regard.

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