Eoin Hayes (Dublin Bay South, Social Democrats)
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405. To ask the Minister for Housing, Planning, and Local Government of any current plans to change the legislation governing commercial rates from local authorities on businesses, in particular providing relief to local small businesses, or the possibility of differentiation of the rate so that larger multinationals pay a higher rate in a progressive manner. [27708/25]

James Browne (Wexford, Fianna Fail)
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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 Tailte Éireann under the Valuation Acts 2001 to 2020.

The amount of rates liable on a property is determined by multiplying the valuation of the property set by Tailte Éireann by the Annual Rate on Valuation (ARV) set by the local authority. The ARV is decided by the elected members of each local authority in their annual budget. Its determination is a reserved function of a local authority.

Commercial rates income makes a significant contribution to the funding of services provided by local authorities such as roads, footpaths, the public realm, litter management, public lighting, development control, parks and open spaces; all essential elements to create the environment in which businesses can prosper. Rates Income provides between 13% and 43% of total funding at individual local authority level, averaging 24% nationally.

Local authorities play a key role in providing a range of business supports and advice to businesses, primarily focusing on attracting new businesses to vacant premises and supporting existing small and medium-sized enterprises (SMEs). These schemes often include grants, rate incentives, and other financial supports to encourage economic activity.

The Government recognised the need to modernise the collection of commercial rates and the Local Government Rates and Other Matters Act 2019 was passed by the Oireachtas and enacted on 11 July 2019. Local authorities are levying and collecting rates under the new legal rates framework since 1 January 2024 and it is important that time is given for new powers provided to local councillors to be fully utilised. The Act contains provisions to add to the suite of options already available to local authorities to support local businesses and ratepayers. These include new rates vacancy abatement and rates waiver schemes, to be decided by local authority members.

The vacancy abatement scheme allows the local authority scope for targeted policies in respect of vacant commercial properties. Consideration can be given to the prevailing local economic environment and prevalence of commercial vacancy. Vacancy abatement schemes may be tailored to particular towns, zones within towns, types, or categories of vacant property or circumstances of the vacant property ratepayer. The rates waiver scheme provides for local authorities to make schemes to support local and national policy objectives, by waiving the paying of commercial rates in certain circumstances. It is open for a local authority to design a waiver scheme as long as it supports county development plans, local area plans, local economic and community plans and the national planning framework. Similar to the decision on the ARV by elected members, rates vacancy abatement and waiver schemes are decided by the elected members of a local authority. Many local authorities offer rates schemes specifically targeting SMEs and smaller businesses, providing a reduction on their rates bills if payment is made within defined timeframes.

The Government has previously encouraged local authorities to show restraint in terms of ARV increases, in order to support local businesses, and local authority members have generally responded very positively. Data from local authority Annual Financial Statements confirms cumulative increases in ARVs have remained significantly below the cumulative Consumer Price Index inflation rate in recent years. Nevertheless, local authorities are fully aware of the challenges facing many ratepayers and work with ratepayers to agree flexible payment options that reflect capacity to pay.

Eoin Hayes (Dublin Bay South, Social Democrats)
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406. To ask the Minister for Housing, Planning, and Local Government to supply any international comparative analysis of commercial rates, in terms of cost per square foot, levies on revenues, and/or as a percentage of costs to businesses. [27709/25]

James Browne (Wexford, Fianna Fail)
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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 Tailte Éireann under the Valuation Act 2001, as amended.

The amount of rates liable on a property is determined by multiplying the valuation of the property set by Tailte Éireann by the Annual Rate on Valuation (ARV) set by the local authority. The ARV is decided by the elected members of each local authority in their annual budget. Its determination is a reserved function of a local authority.

Tailte Éireann is an independent Government agency under the aegis of my Department. Tailte Éireann provides a property registration system, property valuation service, and national mapping and surveying infrastructure for the State. Tailte Éireann is independent in the exercise of its valuation functions under the Valuation Act 2001, as amended, and I, as Minister, have no function in decisions in this regard.

Countries and jurisdictions take varied approaches in the taxation of immovable property and indeed businesses. For example jurisdictions may tax land only, buildings only, or land and buildings. There are also various differences in valuation basis such as capital value or rental value. A range of charges and taxes are payable by businesses in different jurisdictions; therefore, direct comparisons are not possible.

The Government recognised the need to modernise the collection of rates and since 1 January 2024 local authorities are levying and collecting rates under the new legal rates framework of the Local Government Rates and Other Matters Act 2019. The Act contains provisions to add to the suite of options already available to local authorities to support local businesses and ratepayers. These include new rates vacancy abatement and rates waiver schemes, to be decided by local authority members.