Written answers

Wednesday, 9 October 2019

Department of Housing, Planning, and Local Government

Commercial Rates Valuation Process

Photo of Carol NolanCarol Nolan (Offaly, Independent)
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159. To ask the Minister for Housing, Planning, and Local Government if he plans to carry out a review of the commercial rates system to ensure that there is a fair and propositional valuation for all business types; and if he will make a statement on the matter. [41278/19]

Photo of John Paul PhelanJohn Paul Phelan (Carlow-Kilkenny, Fine Gael)
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The Valuation Acts 2001-2015 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. As Minister, I have no function in decisions in this regard.

Under the relevant legislation,, 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 national revaluation programme is well underway and revisions of valuations can take place when the relevant circumstances of a rateable property occur.

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” is defined in section 48 of the Valuation Act 2001 and the NAV 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. I am informed that, 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 Courts. The conclusions drawn from that analysis are applied to similarly circumstanced property using the “comparative” method of valuation which, as the name implies, employs direct comparison with other similar properties.

All valuations determined for rating purposes under Part 5 of the Valuation Acts 2001-2015 must reflect open market rental values at the valuation date specified in the relevant Valuation Order made by the Commissioner of Valuation, and must also endeavour to be correct, equitable and uniform. These are fundamental principles of any modern system of rateable valuation and are specifically enshrined since 2015 in the Valuation Acts.

There are a number of avenues of redress for an occupier of rateable property that 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 Courts on a point of law. Appeals are made on an individual case basis. However, the decision in one case can have relevance in other similar cases.

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