Catherine Murphy (Kildare North, Social Democrats)
Link to this: Individually | In context | Oireachtas source

98. To ask the Minister for Justice and Equality if she will provide a breakdown of the business categories covered under the revaluation 2017 programme; and if she will make a statement on the matter. [16185/17]

Barry Cowen (Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

134. To ask the Minister for Justice and Equality the number of businesses that are being revalued for the purposes of commercial rates in each of the nine local authorities currently undergoing systematic revaluation by the Valuation Office; and if she will provide a statistical breakdown showing the length of time in years that each business was last revalued, for example, the number of businesses that have not been revalued for three years, five years, ten years and so on. [16325/17]

Frances Fitzgerald (Dublin Mid West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 98 and 134 together.

The Valuation Acts 2001 to 2015 provide for the valuation of all commercial and industrial property for rating purposes. The Commissioner of Valuation is independent in the performance of his functions under the Acts and the making of valuations for rating is his sole responsibility. I, as Minister for Justice and Equality, have no role in decisions in this regard. Having a modern valuation base is very important for the levying of commercial rates on a fair and equitable basis across all economic sectors. This has been the policy of successive Governments for many years and is the express purpose of the National Revaluation Programme now being rolled out by the Valuation Office. The current phase of the national revaluation programme, known as "REVAL 2017" covers the revaluation of all rateable properties in counties Longford, Leitrim, Roscommon, Westmeath, Offaly, Kildare, Sligo, Carlow and Kilkenny, where a revaluation is being undertaken for the first time in over 150 years. The revaluation in these counties will be completed in September 2017 and will become effective for rating purposes from 2018 onwards and the programme will then be extended to other counties. The revaluation provisions in the Valuation Acts 2001-2015 provide for the revaluation of all rateable property within a rating authority area so as to reflect changes in values due to economic factors, differential movements in property values or other external factors such as infrastructural changes in the vicinity of a property and changes in the local business environment.

Revaluation is an important instrument in redressing historical anomalies in relation to commercial rates for both urban and rural properties and between particular classes of property within a local authority area. Following revaluation there is a much closer and more uniform relationship between contemporary rental values of property and their commercial rates liability. In essence, the exercise aims to ensure that each ratepayer bears a fair share of the rates burden relative to the modern rental value of the property that they occupy. In fact, the general outcome of the revaluations conducted to date by the Valuation Office has been that about 60% of ratepayers have had their liability for rates reduced following a revaluation and about 40% had an increase, a pattern which is most welcome and is expected to be replicated elsewhere as the programme advances.

The Valuation Act 2001 provides that all buildings and lands used or developed for any purpose are rateable. The basic premise under the Act is that all properties (including buildings) and all developed land are rateable unless expressly exempted under Schedule 4 to the Act. Included in the business category would be all commercial properties across the entire economic spectrum and would typically include such entities as retail outlets; industrial units; office premises and property in the hospitality sector such as hotels and licensed premises which when taken together form the vast majority of commercial property liable for rates. On the other hand, Schedule 4 contains a list of property types which are exempt from rates such as domestic residential premises; places of public religious worship; non-profit making educational institutions; public healthcare property; agricultural land and farm buildings; and property occupied by charitable organisations.

It is important to bear in mind that pending the revaluation of all commercial properties in a local authority area, revisions of the valuation of individual properties will continue to be carried out by the Valuation Office for which there is express provision in Part 6 of the Valuation Act 2001 (as amended). The revision process, which is quite separate from the revaluation programme, provides for the updating of valuations on the existing valuation list between revaluations so that new properties can be valued and added to the list, improved and extended properties can have their valuations updated, and properties that have demolished in whole or in part can have their valuations amended or struck out as appropriate.

The following Table sets out the number of properties currently undergoing revaluation in each of the nine rating authority areas. This is an estimated number as new properties are coming on-stream throughout the process and non-rateable properties are being removed from the valuation lists. As already indicated, this is the first general revaluation of all properties in each of the nine counties since the mid-nineteenth century. However, the valuation of some individual properties in each county would have been revised under Part 6 of the Act, as new properties were added to the valuation lists, existing properties extended or properties no longer rateable removed from the lists. I am advised by the Commissioner of Valuation that there is no requirement in the legislation for the categorisation of rateable properties by business sector and accordingly that information of the number of properties being revalued by business category is not available.

Catherine Murphy (Kildare North, Social Democrats)
Link to this: Individually | In context | Oireachtas source

99. To ask the Minister for Justice and Equality the method associated with the revaluation 2017 programme or the way in which it is being carried out; and if she will make a statement on the matter. [16186/17]

Catherine Murphy (Kildare North, Social Democrats)
Link to this: Individually | In context | Oireachtas source

100. To ask the Minister for Justice and Equality if consideration was given to the impact of upward only rent reviews when proceeding with the revaluation 2017 programme; and if she will make a statement on the matter. [16189/17]

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

105. To ask the Minister for Justice and Equality if she has proposed plans to replace the current system of spend revaluation of properties across Ireland (details supplied); when a graded system rates calculation will be brought forward to deal with these results; and if she will make a statement on the matter. [16761/17]

Frances Fitzgerald (Dublin Mid West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 99, 100 and 105 together.

The Valuation Acts 2001 to 2015 provide for the valuation of all commercial and industrial property for rating purposes. The Commissioner of Valuation is independent in the performance of his functions under the Acts and the making of valuations for rating is his sole responsibility. I, as Minister for Justice and Equality, have no role in decisions in this regard. Under Irish law there is a distinct separation of function between the valuation of rateable property and the setting and collection of commercial rates. The amount of rates payable by a ratepayer in any year is a product of the rateable valuation set by the Commissioner of Valuation, multiplied by the Annual Rate on Valuation (ARV) decided annually by the elected members of each local authority.

Having a modern valuation base is very important for the levying of commercial rates on a fair and equitable basis across all economic sectors. This has been the policy of successive Governments for many years and is the express purpose of the National Revaluation Programme now being rolled out by the Valuation Office. The current phase of the national revaluation programme, known as "REVAL 2017" covers the revaluation of all rateable properties in counties Longford, Leitrim, Roscommon, Westmeath, Offaly, Kildare, Sligo, Carlow and Kilkenny, where a revaluation is being undertaken for the first time in over 150 years. The revaluation in these counties will be completed in September 2017 and will become effective for rating purposes from 2018 onwards and the programme will then be extended to other counties. The revaluation provisions in the Valuation Acts 2001-2015 provide for the revaluation of all rateable property within a rating authority area so as to reflect changes in values due to economic factors, differential movements in property values or other external factors such as infrastructural changes in the vicinity of a property and changes in the local business environment.

Revaluation is an important instrument in redressing historical anomalies in relation to commercial rates for both urban and rural properties and between particular classes of property within a local authority area. Following revaluation there is a much closer and more uniform relationship between contemporary rental values of property and their commercial rates liability. In essence, the exercise aims to ensure that each ratepayer bears a fair share of the rates burden relative to the modern rental value of the property that they occupy. In fact, the general outcome of the revaluations conducted to date by the Valuation Office has been that about 60% of ratepayers have had their liability for rates reduced following a revaluation and about 40% had an increase, a pattern which is most welcome and is expected to be replicated elsewhere as the programme advances.

The basis of rateable valuation for all property currently being revalued as part of the National Revaluation Programme is set out in Part 11 of the Valuation Act 2001. Section 48 provides that the method of determining a property's value generally for revaluation purposes is "net annual value". Net annual value is specifically defined as the rental value 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 in respect of the property, are borne by the tenant of the property.

I am advised by the Commissioner of Valuation that in accordance with the above provisions in the legislation, and in keeping with best practice internationally and well-established valuation principles and case law arising from the independent Valuation Tribunal and the higher courts, various methodologies may be used in estimating the net annual value of a rateable property. The most common valuation methodology used during a revaluation is the "comparative" method which employs direct comparison with other similar properties in the same rating area based on the rental evidence provided by occupiers to the Valuation Office or otherwise available to the Valuation Office. This method is used in relation to the valuation of retail properties, offices and industrial units. However, in some sectors of the business community, such as the hospitality sector, there may be few rental transactions and a paucity of direct comparative evidence of rental values. In these instances, what is known as the "receipts and expenditure" method of valuation is used where trading accounts are analysed to arrive at the rent which a hypothetical tenant might be reasonably expected to expend on leasing the property. Another method of valuation used from time to time in relation to specialist or unique properties, depending on the particular circumstances and type of property involved, is the "contractor's method" where the notional cost of construction, allowing for depreciation as appropriate, and the value of the site are used to arrive at the net annual value. There are no plans at this time to depart from the use of these standard valuation methodologies.

In calculating the net annual value of property being revalued under "REVAL 2017", the Valuation Office uses rental information pertaining to the period around 30 October 2015, which is date by reference to which the value of every relevant property is determined in accordance with the Valuation Orders for the nine counties concerned. In this regard, I am advised that upward-only rent reviews were not a consideration in the analysis of rental transactions by the Valuation Office as upward-only rent review provisions in commercial leases were prohibited in leases entered into after 28 February 2010 which is the date that the provisions of Section 132 of the Land and Conveyancing Law Reform Act 2009 came into force. Accordingly, it was no longer possible to use upward-only rents following enactment of that rent review legislation.

The general outcome of the revaluations conducted to date by the Valuation Office has been that about 60% of ratepayers have had their liability for rates reduced following a revaluation and about 40% had an increase and which is expected to be replicated elsewhere as the National Revaluation Programme advances. Regarding the suggestion that increases of up to 400% in the rates burden have occurred, while such a level of increase may have occurred in some very isolated cases, I am advised by the Valuation Office that increases of this magnitude would be a rarity with only a small number of properties having their valuations increased to such a level. Possible reasons for significant increase where they occur would be that the valuation of some of these properties had not been revised to take account of improvements, extensions, etc. for some considerable time or where the valuations were historically low in comparison with the general level of valuations on that valuation list. Additionally, some properties may have undergone extensive refurbishment that was not reflected in the valuation immediately before the revaluation that is now in train.

There is an extensive process to cater for ratepayers who are dissatisfied with the proposed valuations they receive from the Valuation Office. In this regard, a dissatisfied person can make representations to the Valuation Office within 40 days of the date of issue to them of the certificate of proposed valuation. The Valuation Office will consider the representations and may or may not change the proposed valuation depending on the circumstances of each individual property. If any ratepayer is still dissatisfied with the final valuation to be placed on their property, they have a right to lodge a formal appeal to the Valuation Tribunal, which is an independent statutory body established for the purpose of hearing appeals against decisions of the Commissioner of Valuation.