Éamon Ó Cuív (Galway West, Fianna Fail)
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1177. To ask the Minister for Housing, Planning, and Local Government if it is planned to amend the legislation in relation to rateable valuations to ensure that in circumstances in which a certain class of business is of the view that its members are being overrated, they can appeal as a group rather than going through the cost of individual appeals on the valuation; and if he will make a statement on the matter. [1452/19]

John Paul Phelan (Carlow-Kilkenny, 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 functions under the Acts and the making of valuations for rating is his sole responsibility and neither the Minister for Housing, Planning and Local Government nor I have any function 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 in any calendar year is a product of the 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. The Valuation Acts provide for the revaluation of all rateable property within a rating authority area so as to reflect changes in value due to economic factors such as business turnover, differential movements in property values or other external factors and changes in the local business environment.

A valuation for commercial rates purposes is arrived at by estimating the Net Annual Value(NAV) of the property in question, at a specified valuation date. The term “net annual value” has a legal definition and is set out in section 48 of the Valuation Act 2001 as “the rent for which, one year with another, the property 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 payable in respect of the property, are borne by the tenant”. This definition of Net Annual Value is applied to all rateable properties and classes of business on a nationwide basis.

Estimating the NAV of a rateable property is an evidence-based exercise. During a revaluation, the Valuation Office analyses relevant market rental transactions for all rateable properties, in accordance with the legislation, best practice internationally as set out in published Practice Guidance Notes, well-established valuation principles and case law arising from the independent Valuation Tribunal and the higher Courts. The conclusions drawn from that analysis is applied to similarly circumstanced property using the “comparative” method of valuation which, as the name implies, employs direct comparison with other similar properties.

There are a number of avenues of redress for an occupier of rateable property who is dissatisfied with a determination of valuation made under the provisions of the Valuation Acts, 2001-2015. Firstly, before a determination is made, there is a right to make representations to the Valuation Office in relation to a proposed valuation. Later in the process, if the occupier is still dissatisfied with the determination, there is a right of appeal to the Valuation Tribunal which is an independent body set up for the purpose of hearing appeals against determinations of the Valuation Office. There is also a right of appeal to the Higher Courts on a point of law. Appeals are made on an individual case basis, having regard to the particular circumstances of the property under appeal. However, the decision in one case can have relevance in other similar cases.

There is no provision in the legislation for taking a “class” or group appeal before the Tribunal, as each case is considered on its individual merits and by reference to the specific circumstances of the property. For these reasons, I have no plans to introduce legislative proposals along the lines indicated in the Deputy’s question. However, I am advised that individual appellants can make arguments to the Valuation Tribunal in relation to their concerns about the overall valuation methodology adopted by the Valuation Office for a specific category of rateable property, should they wish to do so.

Notwithstanding this, I am informed that, as a practical measure, it is possible for a Test case to be heard by the Valuation Tribunal. In order to proceed with a Test case, both parties involved, the appellant and the respondent, must agree that such an approach is appropriate. In addition, such a process must be entered into on the clear understanding on how precisely the determination of the Valuation Tribunal in the Test case would be applied to the other cases under appeal identified as being part of the test case series. All cases involved must be similarly circumstanced. A Test case is identified and nominated through mutual agreement between appellants, their representatives or agents and the Valuation Office and this is notified to the Valuation Tribunal. The nominated case would then be heard by the Valuation Tribunal in the normal course.

The Valuation Tribunal is advised of the details of the other appeals to which the outcome of the Test case appeal will apply and the agreed terms of how specifically the outcome of the Test case is to be applied to the other cases in the Test case series. The right of appeal to the Higher Courts on a point of law for either the appellant or respondent still applies in a Test case situation.