Dáil Éireann Debate, Thursday - 7 December 2023
217. Deputy Alan Dillon asked the Minister for Housing, Local Government and Heritage if he will review the current system for determining business and commercial rates for SMEs that are challenged with rising costs; and if he will make a statement on the matter. [51527/23]
View answerLocal 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 and its determination is a reserved function of a local authority. I have no role in this regard.
Commercial rates income makes a significant contribution to the funding of local government, providing between 14% and 47% of total funding for local services at individual local authority level, averaging 27% nationally. Rates income is a very important contribution to the cost 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.
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. 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. Provisional, unaudited data for 2022 suggests that collection levels for commercial rates are strong.
The Government recognised the need to modernise the collection of commercial rates and the Local Government Rates and Other Matters Act (LGROMA) 2019 was passed by the Oireachtas and enacted on 11 July 2019.
Only certain provisions of the Act relating to rates were commenced in 2019. Amendments, which were largely technical in nature, were required prior to further commencement of the Act. The Historic and Archaeological Heritage and Miscellaneous Provisions Act 2023 was identified as the vehicle for carrying Rates Act amendments. That Act was signed into law by the President on 13 October 2023. The necessary provisions of the Act in order to allow local authorities to levy and collect rates under the new legal framework in 2024 will commence from 1 January 2024.
Once commenced, the Act will further facilitate flexible approaches, provided ratepayers engage with the local authority concerned. Importantly, the Act also provides for new rates vacancy abatement and rates alleviation schemes, to be decided by local authority members in order to promote national and/or local policy objectives. My Department is currently preparing supporting regulations and working with local authorities on implementation with a view to commencing these provisions. These new provisions will add to the suite of options already available to local authorities to support local businesses and ratepayers.
The Increased Cost of Business Grant (ICOB) was a measure announced as part of the Budget 2024 package. The ICOB Grant is a matter for my colleague, Mr. Simon Coveney, Minister for Enterprise, Trade and Employment.
