Kevin O'Keeffe (Cork East, Fianna Fail)
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117. To ask the Tánaiste and Minister for Justice and Equality his views on whether it is in order that permit holders should not have commercial rates applied to their premises (details supplied). [45597/17]

Charles Flanagan (Laois, Fine Gael)
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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 statutory functions and the making of valuations for rating purposes 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 valuation of rateable property and the levying and collection of commercial rates. The amount of rates payable in any calendar year is a product of the valuation set by the Commissioner, 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 and is the express purpose of the National Revaluation Programme now being rolled out by the Valuation Office. The Valuation Acts provide for revaluation of all rateable property within a rating authority area so as to reflect changes in value over time due to changes in economic factors such as business turnover, differential movements in property values or other external factors and changes in the local business environment. The Valuation Office is currently engaged in a national revaluation programme, the immediate objective of which is to ensure that the first revaluation of all rating authority areas in over 150 years is conducted across the country, as soon as possible, and on a phased basis. This is a welcome and positive development which is long overdue and on which considerable progress has been made to date.

With regard to property used in the horse training and wider equine industry, I am advised by the Commissioner of Valuation that there has been some apparent confusion in media reports as to the rateability of certain elements of the sector. The Valuation Act 2001 (Schedule 3, Sections 1(a) and (b)) provides that all buildings and lands used or developed for any purpose, are rateable. The basic premise under the Act is that all interests (including buildings) and all developed land are rateable unless expressly exempted under Schedule 4 of the Act. I am advised that the only element of the equine sector which satisfies the exemption provisions in Schedule 4 is the breeding of horses. Buildings used for breeding of horses are classified as being of agricultural use and are "farm buildings" as defined in the Act. Therefore, these buildings are exempted from the payment of rates under paragraph 5 of Schedule 4.

On the other hand, buildings used for the training of racehorses, recreational equestrian purposes or livery premises are rateable under the Act because they are considered to be part of a commercial enterprise and are not exempt under the provisions of Schedule 4. Such buildings would typically include stables for horses, covered riding arenas, tack rooms and ancillary buildings used to support the enterprise. It would appear from the details supplied with the Deputy’s question that the activities being carried out in this instance would not be exempt activities and so the properties in question would be deemed rateable under the Valuation Acts.

While acknowledging the important contribution which the equine sector makes to the economy, there are no plans to reclassify buildings and lands used for training of horses from being rateable to being exempt from rates. To do so would be at variance with the provisions in the Valuation Acts which maintains the long-standing position that property occupied and used for commercial enterprises is liable for rates. Exceptions to this key principle would quickly be followed by demands for similar treatment from the providers of other equally important services, which would be difficult in equity to resist. This could thus substantially reduce local authority revenues, which would have to be made good by imposing corresponding increases on the remaining ratepayers.