Pat Gallagher (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

1667. To ask the Minister for Housing, Planning, and Local Government his plans for the commercial rates Bill; his strategy for assisting and helping struggling businesses in rural locations which to date find commercial rates an onerous burden on their businesses; the way in which he proposes to deal with the regional imbalances in commercial activities between the more thriving east coast and the slower and less recovering west coast; the way in which the proposed commercial rates Bill will deal with same; and if he will make a statement on the matter. [36119/17]

Eoghan Murphy (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation pursuant to the Valuation Acts 2001 to 2015. The levying and collection of rates are matters for each individual local authority.  The annual rate on valuation (ARV), which is applied to the valuation of each property determined by the Valuation Office, to obtain the amount payable in rates, is decided by the elected members of each local authority in the annual budget and its determination is a reserved function.  Rates income is a very important contribution to the cost of services provided by local authorities such as roads, public lighting, development control, parks and open spaces. Locally elected members adopt the annual rate on valuation they consider necessary in order to provide the required services.

Under Part 5 of the Valuation Acts 2001 to 2015, the Commissioner of Valuation is conducting a revaluation of all commercial and industrial properties throughout the State.  The aim of the revaluation programme is to ensure that the valuations used for rating purposes are up-to-date and reflect current market conditions.  To date, revaluations have been completed in South Dublin County Council, Fingal County Council, Dún Laoghaire-Rathdown County Council, Dublin City Council, Waterford City and County Council and Limerick City and County Council.  I understand that revaluations in 10 local authorities, including Carlow, Kildare, Kilkenny, Leitrim, Longford, Offaly, Roscommon, Sligo, South Dublin and Westmeath County Councils are due to be completed this year with valuations to take effect for rates purposes for 2018.  The Valuation Acts 2001 to 2015 fall within the remit of my colleague the Minister for Justice and Equality.

Section 56 of the Valuation Acts 2001 to 2015, as amended by section 8 of the Local Government (Business Improvement Districts) Act 2006, provides that I, as Minister, can make an order directing a rating authority to limit the overall amount of income it could raise through rates in the year following a revaluation to the total amount of rates liable to be paid to it in the previous year, adjusted for inflation.  Rate limitation orders have been made in each of the local authorities that have undergone a revaluation to date and I will be making further orders later this year in respect of the rating authorities currently undergoing revaluations.  

My Department has in recent years requested local authorities to exercise restraint in setting, and where possible to reduce, ARVs and they have responded positively in this regard.  The national average ARV has not changed significantly in recent years.  The national average ARV decreased slightly each year from 2010 to 2015 and has increased slightly in 2016 and 2017 (less than a 1 percentage movement in each case).  Some areas are subject to greater increases or decreases in rates due to local authority mergers and the necessity to harmonise rates across new local authority areas.

The legislative basis for the levying of rates is spread over a number of enactments, some dating back to the 19th century. Many of the provisions are outdated and not suitable for business trends in the modern era. My Department has developed legislative proposals to modernise and consolidate the legislation governing commercial rates.  Among the measures included in the General Scheme of the Bill are provisions to allow a local authority to introduce rates alleviation schemes to support specific national and local policy objectives. The Government approved the drafting of a Rates Bill at its meeting on 11 April 2017.  These proposals will be subject to pre-legislative scrutiny in due course.