Seanad Éireann debate -
Thursday, 4 Mar 1954

Vol. 43 No. 7

Local Government (Temporary Reduction of Valuation) Bill, 1953—Committee and Final Stages.

Sections 1 and 2 put and agreed to.

SECTION 3

Question proposed: "That Section 3 stand part of the Bill."

Mr. Douglas

When the Bill was before us on Second Stage Senator Stanford asked a question which, completely out of order, he put to me. I ventured to answer it by giving what I thought was the position, namely, that all private houses came within the scope of the Bill unless they were already receiving similar privileges and the Minister said that was correct. In general terms I still think that is correct but I have been asked several questions outside the House to which I was not able to give specific answers. I take this opportunity of asking the Minister for some explanation of the provisions of this section.

There is one matter which puzzles me. It is paragraph (e) of sub-section (3). It provides that this part of the Act shall be deemed not to apply in the case of the enlargement or improvement of a building ... where the enlargement or improvement results from carrying out a work of trivial nature of alteration, extension, repair or renewal. That puzzles me because, if it is so trivial, the value should not be increased and, if the value is increased, it cannot be trivial. That requires some explanation because it would be quite absurd that persons who decide to give employment—that is the object of the Bill— by extending their private houses should run the risk of its being declared to be trivial. There is an appeal on the question of triviality but, as it stands, at the risk of making a pun, it seems to me that the paragraph is trivial. There is something that requires an explanation or possibly something that might be amended.

I have been asked another question to which I do not know the answer. It is pretty clear to me that if a house has been built and is under the period of reduction of rates, and it is then extended, it will not get the benefit of this Bill, although I am not quite sure whether it will or not as far as the extension is concerned.

Minister for Local Government (Mr. Smith)

I did not get the second point the Senator made.

Mr. Douglas

Assuming a private house has been built, and it is within the seven years' period in which the rates payable are on one-third of the valuation, and if that house has been in existence some three or four years and the owner now has a larger family and wants to add a room or two, and the valuation is increased: will that house get a reduction on the increased valuation although it has already got the benefit of a reduction on the original valuation? I am sorry if I am not making myself perfectly clear but it is not very simple. This question has been put to me. I am not criticising the Bill. I am merely trying to help people who may have to operate under it

I was asked another question. If a house is of what we call the grant type and was built two or three years ago and received a State grant because it was within the requisite size, etc., and if that house is enlarged now by the addition of a couple of rooms, is there anything in the reference in paragraph (c) to prevent that house from getting the benefit of this Bill?

Mr. Hearne

That would be from the previous limitation of 1,250 square feet to 1,400 square feet.

Mr. Douglas

Whichever the exemption was. If, for the sake of argument, I went out to-morrow and bought a house which had been a grant house, I would not get any benefit; I would pay the value of the house. If I felt I wanted a larger house, and wanted to extend, would I get the benefit under this Bill? It seems to me that it is desirable that in that case there should be a benefit because, as far as private houses are concerned, it is most likely that the kind of additional building which, in present circumstances, you will persuade the private individual to do is the extension of a house which has become too small for his family.

The whole object of this Bill is to increase building during the next two or three years. I am not sure of what happens in the cases which I have mentioned but I would suggest that almost the only way in which the private individual, as distinct from a businessman, is likely to spend money is in putting a couple of rooms on to his house that has grown too small for his family. It would be a serious mistake if that is not included. I am not saying that it is not included. I have looked up some of the Acts and it is by no means clear. I thought it best to ask the Minister to make the matter clearer than it is to me.

Mr. Smith

I dealt with the first point made by the Senator in the short speech which I made here on Second Reading. I may not have dealt with that point as clearly as I should have, but it was not raised as clearly as it has been raised now.

Mr. Douglas

That is right.

Mr. Smith

I was replying to Senator McCrea who seemed to misunderstand this particular provision. I explained the position where reasonably substantial improvements have been effected. Senator Douglas has referred to the term "trivial." The reason for that is it is recognised that a good deal of improvements have been carried out over the years, say, for the last 20 years, of which the Valuation Office had no notice. One of the difficulties that people experienced recently was that if they carried out improvements, not only would the improvements that they carried out recently be taken into account, but they would bring to the notice of the Valuation Office work that had been done over an extended period. If the owner of those premises were to get relief only in respect of the improvements which he had carried out recently he would be discouraged from doing such work for fear the wider field would be covered in the event of a visit being paid to him from the Valuation Office.

It was thought desirable that such people should be encouraged to carry out work now and that they should be given some assurance that if they did so, any work they had done over a period would also be included, provided the work they do now is not trivial. In other words, if, say, I had been extending my premises for a period of 20 years and it so happened, as it often does, that the Valuation Office had not been aware of these extensions and improvements, and suppose I carried out a minor alteration, that I took advantage of a measure of this kind to get seven years' relief and to get coverage for all that I had done and which had escaped attention for the last 20 years, the term "trivial" is inserted to ensure that there will be no escape in that manner. The Commissioner of Valuation will have to be satisfied that the improvements are not trivial. If he decides that they are trivial, and the owner thinks they are not trivial, then, of course, the owner has the right of appeal in the ordinary way. The intention in framing the sub-section in this way was to ensure that the considerable advantage here would be given to the type of person I have described and would not be abused by people who would carry out very little improvement in fact.

The next point made by the Senator was in relation to a house which was already erected, which had obtained rate relief, and which was in the middle of the period, say, of seven years. His query was whether, when the period was about half way through, if the owner proceeded to provide an extension, he would be entitled——

Mr. Douglas

And within the time required in this Bill.

Mr. Smith

Yes. The question was whether such a person would be entitled to the relief here. The owner of a premises — whether they were premises erected with the assistance of a State grant or otherwise — would be entitled to relief under this Bill unless relief was already provided under the Housing Acts themselves. I think that covers the matter.

Mr. Douglas

The Housing Acts may be quite simple to the Minister but, frankly, I have not that intimate knowledge of them and likewise most of the public. On the trivial question: the Minister virtually admits that a valuation increase may take place by virtue of the fact that a person now does something of a trivial nature. I am quite well aware of the fact that if you lodge plans and do not do anything you may find that your valuation is increased. I know cases in point. I know of a lady residing in Dublin who wanted to add a garage to her house. She got an estimate. Plans were lodged, although she did not know anything about it. Then she found that she could not afford to have the work carried out. Nevertheless, although no work was carried out, the house was revalued up to £40. I am told that that is within the valuation laws, as they stand, and I am not blaming the Minister for it but obviously it is a matter which requires changing though I realise that it cannot be done under this Bill. There seems to be the suggestion that somebody can go to the Valuation Office now and say: "I carried out a lot of improvements before and you never spotted them. I never told you about them and I never got an increase. Put on the increase now so that I can get the benefit——"

Mr. Smith

I do not think so.

Mr. Douglas

If that is not the case then I cannot see the trivial point.

Mr. Smith

It is not easy to explain this. I have seen cases myself in recent years where, say, a businessman carried out certain improvements to his premises. He might have changed the whole front of the premises, put in a new window, made it much more modern than it had been and altered the whole structure internally. The Valuation Office came to know of these alterations — surely without any effort on his part. A duty is imposed upon the rate collector to keep the Valuation Office, and his authorities, informed of these matters if he gets to know about them. Whatever way the Valuation Office came to know of these improvements, they came to have a look at them. In the course of their investigation they not only vetted the immediate improvements that the man had carried out but they also vetted his whole premises.

Mr. Douglas

They often do.

Mr. Smith

I am citing a case of which I have personal knowledge. They went into the back yard and they found that he had erected new stores there and that the whole place was completely transformed from the hereditament that had been valued at the time the original valuation was imposed. The law entitled them to have regard to all the improvements that had been effected on that place since it was originally valued. It was a terrific shock to the owner, who would probably understand if his recent effort was the subject of their attention, to have them go over this whole field that he thought was past and done with.

Now, we were aware of this and, in framing this Bill, we said to ourselves that there are probably thousands of such cases in this country — cases of people who had carried out a considerable amount of improvement to their premises and who would say: "Where is the use in introducing proposals that would give us partial relief of rates for seven years on any building that we may decide to erect, or the erection of which we may start after the 27th of July, because even if we get relief in respect of that building or improvement the valuer will look at what we have done in the past 20 years? He will include that and then we will have to pay the full amount on these extensions." We were conscious that if the Bill, when it became an Act, were to leave a position like that it would result in such people saying: "It is all right as far as it goes but it would not be worth taking a chance on." Therefore, we provided that if the owner of the premises carries out reasonable improvements he will get this advantage — if he carries out a reasonable extension, if it is not trivial, if it is not a matter of painting a door or putting in a few new windows and painting them and saying: "I will do this simple work in order to get relief in respect of work which I have done in the course of the past 20 years." He might say: "I have escaped their attention for a long time and I may be caught." As the Senator said, the valuation officers can arrive at his premises, or mine, and if you left the door open it would be a temptation.

Suppose I had a premises that had been extended over 20 or 25 years ago, and that I knew that the valuation was an old valuation, and that I saw a Bill like this being introduced and becoming an Act whereby, if I carried out any minor improvements, I could get relief for seven years on work which was done over 20 years ago, I might do that minor work and get the relief. Therefore, we stipulated that the person who is to get an advantage must carry out what is regarded by the Commissioners of Valuation as a reasonably substantial alteration or improvement, and in that event, he will get relief in respect of work that has escaped attention for a very long period. It is not easy to bring that home as clearly as one would like to, but I think it is sensible enough.

As to the Housing Acts, I would not expect the Senator or any member of this House, or of the other House, or even myself, to know all the provisions of these Acts. There are limitations in the Housing Acts—valuation limitations, floor space limitations and a number of other limitations which affect the issue whether or not a grant will be paid and which, if a grant is not paid, will affect the issue as to whether rate relief as provided in the Housing Acts will be given — and is it not fair enough for me to say that, so far as this Bill, when it becomes an Act, is concerned, any case of the kind cited by the Senator will be entitled to rate relief as provided for in this Bill unless it is provided already in the Housing Acts? In other words, if the extension, or extensions, which the Senator has cited do not come within any of the Housing Acts for grant purposes, be it a reconstruction grant or a new house grant, they will not get the rate relief provided in those Acts, but they will get relief under this Bill.

Mr. Douglas

Would it be possible for the ordinary person with a small sized house to find out authoritatively in some office or place, by submitting plans, whether or not he came within the Act and was entitled to rate relief? I am particularly anxious to encourage what I call small building and it could be encouraged very considerably, because people have spoken to me about their position if they add a couple of rooms to their houses and I have had to say that I could not tell them as I did not know all the circumstances. My whole object is to encourage building and I think it would be a good thing if there was some official who was prepared to deal with it and could deal with it.

Mr. Smith

He does not require that information in this sense, that he must get rate relief under some head. He does not have to submit plans to any official or department to find out whether he is entitled to rate relief or not. He must get it one way or the other. If he does not get it under the Housing Acts, he must get it under this Bill when it becomes an Act.

Mr. Douglas

That is exactly what I wanted and I think it is rather important.

Mr. Hearne

Perhaps I could give an example which might help the Senator. A house to which a room may be added under certain provisions of the 1946 Act in relation to the prevention of T.B. is already covered, whether the room was built within the period prescribed in the Bill or not, but, in the case of a similar house next door, the owner of which decides to build exactly the same addition, but not under the 1946 Act, it will benefit under this legislation.

Mr. Douglas

The Minister's last statement is exactly what I wanted. I think it should be given publicity and I hope it will get it.

Mr. Smith

I can put it in a few words to make it clearer. This Bill is designed to gather up every extension and improvement and to give rate relief in respect of it which is not covered by any existing law.

Question put and agreed to.

SECTION 4.

Question proposed: "That Section 4 stand part of the Bill."

Mr. Burke

Sub-section (1) refers to "where the erection, enlargement or improvement of a building is begun and completed during the prescribed period." Might I ask if he would see his way to extend the period, because people who improved their premises during the past five or six years, or even ten years, and who will now come under the notice of the Valuation Office will be rated on the 1954 valuation, although they built the addition in 1944, which will be a very much higher figure than it would have been ten years ago. These people will have to pay a very heavy fine for their initiative in improving their premises. I believe that the commissioners are bound, when valuing, to have regard to the general level of valuations in the area, but my own experience is that that is not interpreted in favour of the person whose premises are valued. The benefit of it is given to the Commissioners of Valuation rather than to the person whose premises are valued or revised.

I did contemplate putting down an amendment asking that the commissioners should have regard to the general level of valuations, when valuing, and I was told that it was covered in the Valuation Act. My own experience as a member of a public body is that, where a revision takes place, the benefits of that section in the Valuation Acts are not given in the way they ought to be to the person whose premises are valued or revised. This whole matter of valuations is of great public importance and the Bill is an effort to deal with the situation as it arises at the moment. I should be glad if the Minister could give me some information on the point.

Mr. Smith

I am not very clear as to what the Senator means. Is it his suggestion that a man who has from time to time over a period of 25 years made alterations to his premises——

Mr. Burke

Not even as long as that — ten years.

Mr. Smith

Let us say ten years. Assuming he made some of these improvements ten years ago, if they had been valued at the time, the valuation would be lower. Is it the suggestion that some provision should be made now to ensure that, in bringing them into the net, the valuation to be placed on them now should be the valuation that would have been placed on them then?

Mr. Burke

No, but maybe he could be given the same consideration as is being given to anyone else.

Mr. Hearne

Provided he pays the arrears.

Mr. Smith

In that regard, the Senator is setting a problem. Is the whole difficulty of this Bill not the question of extensions carried out over a period? Would it not be impossible to determine just when these extensions were carried out and would the time at which they were carried out not have a tremendous bearing on the point made by the Senator? Briefly, I think the Senator's suggestion is looking for too much perfection. If I have extended my premises over a period of 20 years and have escaped the attention of the Valuation Office, it means that I have had ten, 15 or 20 years of freedom. If all that has now been legalised and I am going to get complete security in respect of two-thirds of any increase now being placed on me for seven years, I think I am not doing too badly.

Mr. Burke

If a person comes under the notice of the Valuation Office for some improvement done before the 27th June, 1953, he gets no immunity and will be valued at a 1954 valuation, and he will not get any immunity under the Act. I think this whole valuation business is so complex and difficult that it might be better if I did not go further with this point. I was going to ask the Minister on the Final Stage of the Bill if he would have the whole situation examined.

The Minister is covering building during a certain period, and in that way he is giving certain reliefs and doing justice to people where anomalies and injustices would arise. I do not want to press the point because, by doing so, I might make the debate too wide and come under the notice of the Chair.

Mr. Smith

The reason I was interested in the point was because that case was not made at all in the other House. I found difficulty in understanding it, because my own approach would be along different lines from the case made by the Senator. My own approach would be like this. In the case of owners of premises who had escaped the view of the Valuation Office for so long, irrespective of when they carried out these improvements, and even if they took no advantage of this measure which we are now discussing, the Valuation Office could, at any time, arrive down on their premises and increase the valuation in respect of these improvements.

They would have to pay on the full valuation while, in this measure, we are providing that if they add a reasonable addition to their premises they can have a further relief in respect of the valuation over all the improvement for a period of seven years. I think, myself, that such an owner of property could regard himself as doing very well —in fact, doing excellently.

Mr. Douglas

I hope people will not get the idea that all sorts of people have been escaping the Valuation Office in Dublin. I should like to meet them. Country people seem to talk in a different language. I think, possibly, the position is not the same somewhere else.

Mr. Smith

The Senator wants to ward off this from the city. I can tell the Senator that, in my limited experience, it happens both in town and country.

Mr. Douglas

Certainly it is not as extensive as far as Dublin is concerned.

Mr. Meighan

Might I ask the Minister what is the position in regard to people who carried out improvements during the last nine or ten years and who were brought within the net immediately after the improvements were made and rated, and who now propose to carry out further improvements? Will they get relief on what they have done during the past number of years?

Mr. Smith

I am afraid not.

Mr. S.T. Ruane

So far as licensed premises are concerned, and where improvements have been done within the specified period which would warrant a reduction in the valuation, would that valuation operate so far as a reduction in the spirit licence is concerned?

Mr. Smith

No.

Mr. Douglas

Only on the rates.

Question put and agreed to.

Section 5 agreed to.

SECTION 6.

Question proposed: "That Section 6 stand part of the Bill."

Mr. O'Donnell

I was not in the House on the last occasion when the Bill was before it. I happen to be associated with Buncrana industrially, the town to which this particular section applies. I know that the inhabitants of that town are very grateful to the Minister for the inclusion of this section in the Bill. There was near chaos in Buncrana some time ago when the new valuations were disclosed.

This is probably the most promising industrial town in Ireland. It is situated near Inishowen in the Fíor-Ghaeltacht itself. The work done there is of great importance and any action that might adversely affect industrial development there would have very serious reactions on the language movement. I should like to take the opportunity of thanking the Minister on behalf of all those interested in industry in Buncrana for the inclusion of this important section in the Bill. I should be very glad if the Minister would explain the reason for the ten years' period before the new valuation is imposed.

Question put and agreed to.

Sections 7 and 8, the Title, and Schedule agreed to.

Agreed to take the remaining stages now.

Bill reported without amendment and received for final consideration.

Question proposed: "That the Bill do now pass."

Mr. Burke

I should like briefly to ask the Minister if he could tell us when he proposes to bring in a comprehensive measure to deal with the Valuation Acts. The Valuation Acts under which we are working in this country are the old——

Mr. Hawkins

I suggest that that has nothing to do with the Bill before the House.

Mr. Burke

The Valuation Acts are now over 100 years old. They were based on the value of commodities at that time. The valuations in rural Ireland particularly in regard to land are static. The valuations in towns and cities and even those in regard to improvements on farms are not static and are allowed to increase. With the general devaluation of money over the years, we will arrive at a situation where you will have virtual derating in one section and a whole new system of valuations being done in a piecemeal way in the towns. Whatever we are going to value we will have to have some standard to go on. Mr. McGilligan, when he was Minister for Finance, said to me in this House about six months before he went out of office that there were problems involved and that he was having them examined. I presume they are still being examined.

Mr. Hawkins

He is probably examining them still.

Mr. Burke

I would like to ask the Minister before he concludes on this Bill to tell us if he does propose to deal with this very important question in a more comprehensive way at some future date.

Mr. Smith

I do not know if the Senator is inviting me to resurrect a revaluation proposal that was presented to the Dáil about 1938 or 1939. That proposal was, I remember, very badly received on all sides at the time.

Mr. Burke

I should say it would be.

Mr. Hawkins

Defended by Fine Gael and the Irish Independent.

Mr. Burke

I have no shares in that.

Mr. Smith

I remember listening to all the criticism that was offered to that proposal. I think it was in the other House that mention was made of this same thing, the desirability of having a re-examination of the whole valuation system. As I said there, I do not know what Deputies or Senators mean when they refer to an examination of the system unless they suggest that there is an obvious need for an approach to the revaluation of the whole country. With the experience of how the proposal was received at the time I mentioned, I said I did not think it would be any great encouragement to an individual or a Department to take up the same strings again. I admit that various people inside this House and outside it would be able to show the tremendous changes that have taken place in the business life and the business activity of the whole countryside and how the passage of time has affected places and premises that were highly valued long ago on the strength of that business. Nevertheless, having regard to the reception that was given to the proposal on that occasion, I do not think you would be likely to have a similar approach now.

The Senator mentioned Buncrana. The proposal so far as Buncrana is concerned was an effort on our part to take the town out of a very awkward situation that they themselves, their representatives or members of the council speaking for them had brought them into. When certain amendments to what was provided here were suggested in the other House I said it was not intended to relieve them for all time because the valuation of every town is increasing progressively.

I would be able to show, if it were necessary, how the valuation of Buncrana, Letterkenny, and the other urban centre in Donegal whose name I cannot remember, has been increasing over the years. It would not, of course, be fair or reasonable that we should clamp down on Buncrana on the basis of the valuation that existed, say, in 1950 when this review took place which increased the valuation from £7,000 odd to £11,000 odd. Therefore, we had to have regard to what the movement was, to what the annual increase had been in the past and we arrived at a basis of calculation that I think is entirely fair to the town and will result in the valuation of Buncrana reaching the point at which it would have remained if it were not for the provision which is contained here. I can understand how anxious the people of Buncrana were in this regard and I was very glad to have been able to provide some solution for that situation.

Question put and agreed to.