Barry Cowen (Laois-Offaly, Fianna Fail)
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67. To ask the Minister for Public Expenditure and Reform if he provide detail of the commercial rates liability of semi State companies; and if he will make a statement on the matter. [45402/14]

Brendan Howlin (Wexford, Labour)
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The basis of rateable valuation for all building property, including property occupied by semi State Companies both in the commercial and non-commercial sectors, 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 the comparative method which as the name implies employs direct comparison with other similar buildings in the same rating area.

In the absence of direct comparative evidence of value two other methods may be used. The first of these is what is known as the receipts and expenditure method of valuation where trading accounts are analysed to arrive at the surplus available for rent and rates. Another method of valuation used from time to time depending on the particular circumstances and type of building involved is the contractor's method. This relies on the notional cost of constructing a building and the rental of that building will be related to the annual equivalent of the cost of construction, allowing for depreciation as appropriate, and the value of the site is used to arrive at the net annual value.

There is also provision in the Act to allow for the valuation of buildings occupied by a public utility undertaking, e.g. an electricity or telecommunication company, to be valued on a global basis, whereby the valuation of all buildings are not valued on an individual basis but are taken as a whole on a nationwide basis and the valuation thus produced is known as a global valuation.

As the Deputy is aware, the levying of rates is a matter for local authorities and the amount of rates to be collected from a rated occupier whether a semi State company or otherwise is a function of the Annual Rate on Valuation or ARV set by each local authority, and the value of a property on the valuation list.