Written answers

Thursday, 16 December 2021

Department of Housing, Planning, and Local Government

Commercial Rates

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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332. To ask the Minister for Housing, Planning, and Local Government when commercial rates are applied to empty commercial units that have never been tenanted; the average length of time it takes to put a rateable value on commercial units that have never been occupied; the measures that are being taken to ensure that rates are applied and charged to commercial units that have never been occupied to combat vacancy; and if he will make a statement on the matter. [62635/21]

Photo of Peter BurkePeter Burke (Longford-Westmeath, Fine Gael)
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The Commissioner of Valuation is independent in the exercise of his functions under the Valuation Acts 2001 to 2020. The making of valuations for rating purposes is the sole responsibility of the Commissioner and I, as Minister, have no function in decisions in this regard.

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 Commissioner of Valuation under the Valuation Acts 2001 to 2020.

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.

Valuation lists comprising all rateable properties in the State are maintained using two statutory valuation processes known as “revaluation” and “revision”.

Firstly, revaluation is a process where all rateable properties in a Local Authority area are valued periodically by reference to a single valuation date. Following the first revaluation, subsequent revaluations of each rating authority area will then be carried out on a cyclical basis no sooner than five years and no later than ten years after the first revaluation (Section 25 of the Valuation Act 2001).

Secondly, revision is a process to reflect structural changes to individual properties or the addition to the valuation lists of new properties between revaluations. It is a function of a local authority to apply to the Commissioner of Valuation for the appointment by the Commissioner of an officer of the Commissioner to carry out a revision of valuation under Part 6 of the Valuation Acts 2001 (as amended by the Act of 2015).

In line with best international practice, the valuation element of the rating system should have both a comprehensive revaluation and revision programme running in tandem. Further information about these processes is available at www.valoff.ie/en/

New rateable properties are added to the valuation lists on foot of revision applications made by the relevant Local Authority to the Commissioner of Valuation. Once a new rateable properties is capable of beneficial occupation it can be valued and entered on the valuation list whether it is occupied or vacant. Section 28(5) of the Valuation Acts 2001 to 2020 provides that once a valuer had been assigned a revision application the property referenced in the application should be valued and entered on the valuation list within 6 months.

While the average length of time it takes to put a rateable valuation on a new rateable property that has never been occupied is not available it is important to note that valuing a new rateable property involves a number of statutory steps. The process usually begins with an inspection of the property which is followed with the issue of a proposed valuation certificate to the owner or occupier of the property. The owner or occupier may within 40 days of the issue of the proposed valuation certificate make representations to the Valuation Office. Any representations received must then be considered before the valuation is determined and a final valuation certificate is issued. The Valuations Acts provide for the valuation list to be amended seven days after the issue of the final valuation certificate.

Where a property is newly entered onto the valuation list by the Commissioner of Valuation during a financial year it is not subject to rates in that year, however, it is subject to an Entry Year Property Levy under section 7 of the Local Government (Business Improvement Districts) Act 2006. The Entry Year Property Levy effectively imposes rates on properties with effect from the date of their entry on valuation lists. It is a charge that applies until such time as the property can be charged rates. A commercial property is liable for rates in the normal way in the financial year immediately following its entry onto the valuation list.

Existing commercial rates legislation provides for a refund of rates paid on vacant commercial properties in certain circumstances. The Local Government Act 1946, provides that where a property is unoccupied on the date of the making of the rate, the owner becomes liable for rates. However, the owner is entitled to a refund if the property is vacant for specified purposes, these being if the premises are unoccupied for the purpose of additions, alterations or repairs; where the owner is bona fide unable to obtain a suitable tenant at a reasonable rent; and where the premises are vacant pending redevelopment. The collection of rates and the determination of eligibility for a refund in this context are matters for each individual local authority. The Local Government Reform Act 2014 gives discretion to the elected members of local authorities to vary the level of rates refunds that apply in individual local electoral areas within the authority’s administrative area. A decision to vary the level of rate refund applying is a reserved function of elected members of a local authority.

The Local Government Rates and Other Matters Act 2019 modernises the legislation governing commercial rates and contains provision for schemes for the abatement of rates on vacant properties (not yet commenced). The Act provides that a local authority may provide a temporary abatement for vacant properties, subject to any maximum relief which may be specified by the Minister, to ensure that all property owners (other than those whose rates liability would be below a de minimis threshold) make some level of payment to the local authority. The Act allows the Minister to prescribe, that the maximum level of relief can be further reduced by individual local authorities. Currently only a portion of the Act has been commenced. Commencement of the remaining elements of the Act, including in relation to rates on vacant property, has been delayed due to the COVID crisis. The revised aim is to achieve the necessary amendments and make prescribed regulations in 2022 so that the legislation would be operational for the planning of local authority 2023 budgets.


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