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Seanad Éireann debate -
Wednesday, 7 Nov 1956

Vol. 46 No. 11

Local Government (Temporary Reduction of Valuation) Bill, 1956—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

The purpose of this Bill is to extend to the 31st March, 1960, the period within which the erection, enlargement or improvement of a building must be completed in order to qualify for the two-thirds remission of rates for seven years provided by Part II of the Local Government (Temporary Reduction of Valuation) Act, 1954.

Part II of the 1954 Act provided for the granting of two-thirds remission of rates for a period of seven years on the valuation of new buildings and on the total increase in valuation of existing buildings that are enlarged or improved, where the work on the construction, enlargement or improvement was begun and completed in the period commencing on 27th July, 1953, and ending on 26th July, 1956. The remission did not apply to houses erected by local authorities under the Labourers Acts or the Housing of the Working Classes Acts and owned by a local authority, houses in respect of which grants or rates remission were given under the Housing Acts, or under the Housing (Gaeltacht) Acts, farm buildings receiving relief from rates under Section 14 of the Valuation (Ireland) Act, 1852, or premises in respect of which a local authority has decided to remit rates under Section 9 of the Undeveloped Areas Act, 1952. Subject to these exceptions the remission applies to all buildings including hotels, shops, factories, offices and dwelling houses. Where a building is enlarged during the prescribed period and in the revised valuation following that enlargement, earlier improvements or additions are taken into account, the remission also applies to those earlier improvements and additions.

Legislation granting rates remission in respect of new or improved buildings for an initial period after their construction or improvement has been in operation for over 30 years. In the years 1920 to 1939 all buildings of the type covered by the present Bill received rates remission. Between the years 1939 and 1953, however, the remission was confined to dwellinghouses. The 1954 Act, which was introduced by my predecessor, restored the concession of rates remission to buildings other than dwellinghouses. Statistics as to the number of buildings which received this remission are not readily available but on a rough estimate, however, it would appear that about 1,500 premises per annum received the benefit of the Act.

As Senators are aware, this type of rates remission legislation has never been on a permanent basis but has been continued by Acts whose duration was limited. The reason for this is that a concession of this nature, which is paid for by the ratepayers, must be subject to review from time to time lest in changing circumstances it might be imposing an unnecessary burden on the ratepayers. In the course of the debates on the previous Bill many members of the Oireachtas expressed the opinion that its period of application was too short. My predecessor, in reply, pointed out that the question of an extension could be considered when the period of application of the Bill expired.

I consider that there is still need for the concession given by the 1954 Act. I think that from the national point of view the impetus it gives to building projects more than compensates for the extra levy it places on the ratepayers. I feel, therefore, that this concession should be continued for a further period and, accordingly, I recommend this Bill to the House.

Cuirim fáilte roimh an mBille seo, cé ná deineann sé ach na reachtanna atá ann cheana fein maidir le tithe do thogaint agus tithe do dheisiú d'athnuachaint. Tá sé i gceist: an leor i láthair na huaire an méid cabhrach atá á thabhairt againn do lucht togtha agus deisithe tithe? Is mó go mór an méid costais atá ag baint leis an obair sin agus ba cheart é sin do choiméad ar aigne. Ba ceart don Aire an taobh san den cheist do scrúdú.

I have not very much to say about this Bill because, as I have said already, it is a continuing measure. It proposes to continue the operation of existing legislation for a few more years until 31st March, 1960. There is no alteration of any kind, as far as I can see, being made in the existing Acts dealing with this question of the remission of rates, and there is to be no departure from Part 2 of the 1954 Act, providing for a grant of two-thirds remission of rates for a period of seven years on the valuation of new buildings and on the total increase in valuation of existing buildings that are enlarged or improved. I do not know, first of all, before I deal with a few further points I have in mind, how the title of this Bill came to be couched in the terminology that we have before us. It is called the Local Government (Temporary Reduction of Valuation) Bill. As far as I can see, it is not a temporary reduction of valuation, but a temporary remission of rates, and the two things are not the same. They are two different things.

Reduction of valuation surely means remission of rates.

One is based on the other, so I would advise the Minister to look into the terminology of the title of the Bill.

As to the two-thirds remission of rates, as we call it, for seven years, there is no improvement and no change. It is meant to be a continuation of the seven year period. One would have thought that, having regard to all the difficulties that lie in the way of people who propose to build new houses or reconstruct existing houses, an improvement in the concession of a seven year period might be considered. As I have said before —I think, in this House—the greater the cost of building, the higher the valuation will be in some cases and, generally speaking, the greater the cost of building, the more difficult it is for the person in question to face the task. That being so, it would be understood if there was a greater encouragement given to such an individual at the present time, but instead we are just continuing what has been in existence for a number of years and taking our stand on legislation that was framed at the time when building did not present the same difficulties as it presents to-day.

I understand also from the Minister's statement that buildings such as hotels, shops, factories and offices, as well as dwelling houses, are to be covered by this measure. That also was contained in the 1954 Act. However, there is one question which I should like to bring before the Minister, namely, the question of valuations. Senators may remember that, some time ago, an attempt was made to have the valuations in this country revised, because it was believed that in many cases valuations were too high and it was also considered that some valuations were too low. The reconsideration of valuations is very important because on it depends the striking of rates. As everybody knows, where certain people get away with very low valuations, the burden has to be borne by people who have high valuations.

Is that not a different question and one that is not dealt with in this Bill?

The Title of the Bill refers to the temporary reduction of valuation.

The Senator should concentrate on what the Bill contains.

Surely the debate should be on what is in the Bill and not on the Title? Senator Kissane knows that as well as the rest of us know it.

But the Title of the Bill is taken from the substance of the Bill. It is arrived at in accordance with the provisions of the Bill. The Title is "Local Government (Temporary Reduction of Valuation) Bill, 1956." I thought I could say a word or two about valuations.

I think the Senator is doing himself a wrong. I hesitate to believe he really thought that.

Having said what I have said about valuations and about the necessity for a revision of the valuations all over the country, I will content myself now by saying that we welcome the provisions of this Bill, such as they are, despite the fact that we see no improvement in them beyond what is already in existing legislation.

I, too, feel that this Bill is very desirable. If we are to encourage and promote building, and particularly to prevent buildings from falling into decay, or encourage schemes of desirable reconstruction of premises, then the Bill is, I think, very appropriate. I am glad the Minister has seen fit to continue the Bill which the Minister for Local Government brought in in 1954, for a further six years. If that were not done in these days of high rates and increasing valuations, people who require to build or reconstruct premises would be up against fairly serious financial problems and it would reduce still further the number employed in the building trade. Even as it is, I feel that under Section 12 of the 1954 Act, where a supplementary grant is paid, valuations may be increased and people may have to pay on a 100 per cent. increased valuation where the valuation officer decides that a revision of the valuation of the premises at that date was out of date and that the Bill would only affect that part of the premises on which reconstruction had taken place. If that is the position, the Minister should do something to ensure that people will not be restricted to one-third rates for seven years on the increased valuation only.

The fear that valuations will be increased deters people from carrying out desirable schemes of reconstruction and improvement and they allow premises to fall into disrepair. Whether it is a scheme of decoration or the putting in of a shop window in a business premises, or simply a question of painting a premises. I feel something should be done to inform the public that, in itself, that will not necessitate an increased valuation of their premises.

I fear that the public feel that to carry out any scheme of decoration or improvement would tend to focus the spotlight of the Valuation Office on their premises and that, for that reason, many people do not make the improvements which are necessary and desirable. It is something similar to what obtained in the old days before we achieved fixity of tenure and fair rents when the landlord increased the valuation of a tenant's holding when the tenant carried out any improvement. If that is the case and if, under an Irish Government, we want buildings to improve to the extent to which they should be allowed to improve, the extension of seven years may not be sufficient. I understood that, under Section 9 of the Undeveloped Areas Act, 1952, the period is ten years. I would respectfully ask the Minister to consider, even at this stage, extending the Bill from a seven-year period to a ten-year period on the one-third valuation.

I suggest that the provisions of this Bill should be made permanent. At present, local government law is a complete labyrinth. The passing of temporary Bills which are repeated periodically seems only to add to it. It does not seem to me that this measure is permanent, but rather that it may be taken whenever it is desired to do so.

As regards the argument about the Bill itself, might I point out that it is really a reduction of valuations, because what the Bill says is that for the purpose of assessing the rate, the valuation is deemed to be reduced.

I want to thank the Minister for bringing in this Bill, but I cannot be too generous in my thanks because I believe that the whole valuation laws of this country are bristling with anomalies. Any progressive person in any town who does anything feels that injustice will be applied to him by the operation of the Acts which we have on the Statute Book. That is bad; it is bad for the Government to leave bad laws on the Statute Book.

Is the Senator referring now to valuations?

I am referring to the bad laws as they apply to valuations. A valuation officer mentioned to me a certain place on which he was going to put an increased valuation. He said that the place might be let for £6 a week and he was going to put on a valuation accordingly. I said that there were nearly 100 other houses in that street and I asked him if all the premises could be let for £6. He said they could not. "Therefore," I said, "would that be the letting valuation?" They apply an arbitrary thing —because, say, there is a black market in property during a certain period, they apply that as the letting value.

I think that they will have to go back to the original Valuation Act of 1852. This matter was raised at the meeting of municipal authorities this year and it was discussed at some length. I believe they will have to go back and relate the valuations of properties in towns to some fixed notion like the related value. Land was valued by Griffith in the 1850s on what crops it produced, and so on. There ought to be some notional value in regard to property. In every town in Ireland, you find that 10 per cent. of the property has been valued within the past 15 years and the rest has not been valued for 100 years. That means that 90 per cent. of the people feel they are suffering from an injustice. When there has been revaluation, what has happened is that the revaluation takes place on the basis of the 1954 Act, or whatever Act it was, and there were the cases of Waterford and that of Buncrana.

I am not going to develop that any further, as I do not think it is fair, but, in passing, I should mention that the municipal authorities, who come up against this much more than the county councils do, feel that something ought to be done to investigate the position and to try to remedy it. It is not going to be remedied by a revaluation of the country. That would only mean that the townspeople would be asked to pay all the rates and then the country men would take no interest in future, as they would be almost completely derated. That would not be a good solution to the problem.

I should like to support the remarks of previous speakers and to make the comment that the reduction of valuations is mixed up with the making of rates. I want to bear out what Senator Burke said. If a man builds his own house——

I have nothing to do with valuations. That is a matter for the Minister for Finance.

I know that, but this Bill deals with both of them.

No, no. I have nothing whatever to do with valuations.

Yes, but I would submit there is need for the change submitted by Senator Burke. I think also that the number of years being put on to the remission of rates is not sufficient. The man who builds his own house and who has made great sacrifices to do so, who did not depend on the local authority or anybody else to build it, should have a remission of rates for at least about 15 years.

Hear, hear!

If it is proper to have an amendment to extend the period beyond 1960, I would be prepared to put down an amendment that that be done. I am digressing for a moment. Picture the man who builds his own house, which is a bungalow, on land which was virgin soil, whose rateable valuation was only 35/- an acre, going out into undeveloped land; and the next thing is that the valuer comes along and puts £15, £16 or often £20 on very modest houses as valuation. In most places the rates now are about £2 in the £ valuation. I think the Minister will have to make up his mind to extend the period, when he is dealing with valuations, and that he will have to extend the remission beyond 1960.

Will the Senator put down an amendment?

We will, yes.

With regard to the point made by Senator Kissane, as to the Title of the Bill, may I refer him to Section 4 of the Local Government (Temporary Reduction of Valuation) Act, 1954? Section 4 sub-section (1) sets out:—

"Where the erection, enlargement or improvement of a building is begun and completed during the prescribed period and an increase in the valuation of a tenement including the building or part of the building is made by reason solely or partly of the erection, enlargement or improvement, the valuation of the tenement shall be deemed to be reduced for rating purposes by two-thirds of the increase."

It refers to the valuation, not to the rates, and it is on that the Title of this Bill is based.

That is most confusing.

The Senator had the opportunity, I think, of hearing it debated. I think he actually was a Deputy at that time.

I remember it.

Listening to this debate, one would think that 1954 was the first time the benefit was bestowed upon the builder of houses. That is not so. The oft-maligned and many times forgotten old Cumann na nGaedheal Government of 1925 are the people who deserve the credit for the first introduction of a Bill such as this —not only in 1925 but again in 1927 when a similar Bill was introduced to enable local authorities to make certain remission of rates. The Act of 1954 was merely a continuation. These Acts were introduced down through the years.

If there is one thing that I cannot stand more than another, it is Senators who are members of local authorities deploring the increase in local rates when speaking in the local council chamber and who then come here and advocate legislation for their increase.

We are told the same thing, that it is a matter for the Minister for Finance, and not for the Minister for Local Government, to fix the valuation.

Yes, but the position is that every year there is a remission of rates, there is an addition of rates on the people who are paying rates. You give these reductions only at the expense of the other ratepayers. Senators Burke, Walsh and Hickey have asked me to extend to 15 years the remission of rates. Do they want their fellow ratepayers in Tipperary, Donegal or Cork to make up the difference?

We do not.

You do not, of course, and I agree with you. Is it fair to ask the ratepayers of this country to pay for the reconstructions or for the new houses built by private individuals?

It is fair, very fair.

You advocate— and I think Senator Walsh does—an increase in the remission at the expense of those ratepayers who are paying year in and year out and who are paying for the ten year exemption which these occupiers of new houses have got. The Senators ask that that be given for another five years. It is something to which I will not agree. That is what the Senators are advocating in this House; that is what Senator Walsh advocated. I am here to protect the ratepayers down the country from such as that.

The Minister knows very well it is on new valuations.

We have no say in the fixing of valuations.

So far as valuations are concerned, I propose to leave that point, because I have nothing whatever to do with them.

The Senators who have been discussing them know it is entirely a matter for the Minister for Finance. I have nothing to do with them and I do not think I should express my personal opinion on the point. I am not talking of valuations, and I have given no expression of opinion on valuations, but I have on rates. I think it was Senator Walsh who gave as one of his reasons why there should be a longer period of remission than seven years "to ensure that we would not reduce the number of people employed in the building trade". That is an expression being bandied not only around this House and the Oireachtas but around the country generally and it will come as a surprise to Senators to know that the total number of houses being built or reconstructed in this country on 30th September, 1955, was 32,711 and that the total number of houses being built or reconstructed on 30th September, 1956, was 34,129.

Have we any figures as to the number of new houses being built by individuals during that period?

Yes. The number of new grant houses—I think these are the houses the Senator refers to— being erected on 30th September, 1955, was 11,005, and the number being erected on 30th September, 1956, was 10,940—in other words, only 65 houses less—but the number of private houses being reconstructed on 30th September, 1955, was 15,301 and the number being reconstructed on 30th September, 1956, was 17,133.

The Minister is aware he cannot have an accurate figure and he has not given the number of those employed in the building trade.

Do not hedge. Perhaps the Senator would accept my word. I am giving the figures. My Department is responsible for the paying of the grants and I take it they are correct in the figures they give me and it is unfair for the Senator to say I am misleading this House with figures which are not correct. I am giving the figures now and I stand over them. The total number of houses being built and reconstructed by local authorities and by private individuals, on 30th September, 1955, was 32,711 and on 30th September, 1956, was 34,129. We hear these sweeping statements being made that there is less building now than there was 12 months ago, although the figures contradict those statements. When we are talking about the building trade generally, £200,000 more was spent on the building of national schools this year than last year and £250,000 more is being spent on the building of vocational schools than was spent last year.

An Leas-Chathaoirleach

These matters do not arise on this motion.

I apologise, but when I hear sweeping statements such as these I think I am entitled to contradict them, but I certainly bow to the ruling of the chair.

Are the houses given there completed?

That is the number erected on 30th September last year and the number being erected in September this year. I do not want to mislead the House in any way. I will give the wording of the memorandum I have here: "Total new houses being erected by local authorities or by private enterprise assisted by grants, and reconstruction of private dwellings qualifying for housing grants"— 32,711 on 30th September, 1955 and 34,129 on 30th September, 1956. Those are the facts and we can only accept facts.

The whole trouble is due to the enormous valuations put on these individuals.

That is not a matter for me; it is a matter for the Minister for Finance. I have nothing whatever to do with it.

You cannot dissociate yourself from the matter, being the Minister responsible for the building of houses.

What I am trying to prove is that there is no legislation which discourages the building of houses.

Between the high valuations and the ground rents, you will have less building by private individuals.

People sometimes build their own houses and seek neither State nor local authority aid. They build their own houses and they pay the full rate on their houses, but here we have the State coming to the relief of the builder by giving him a grant to build his house and then the local authority comes to his assistance by giving him a supplementary grant. The State then goes further and gives him a loan and not only that but they give him a remission of rates. I think the State does quite a lot to encourage the building of houses and when I find Senators like Senator Walsh and Senator Burke advocating an extension from seven to 15 years of the remission of rates to increase the rates on the ratepayers in such places as Tipperary and Donegal, I cannot agree with it.

Question put and agreed to.

An Leas-Chathaoirleach

Next stage?

This is only a Bill to extend the date. That is all that is in the Bill and perhaps the House would take the other Stages now.

Are we not entitled to put in amendments?

The Bill is only a Bill to extend the date.

Are we entitled to put down an amendment to extend the period of remission?

Oh, yes; to extend the date—that is all.

It will remain in force up to 1960. We can always extend it in 1960.

I suggest that the House take the other Stages now.

What Senator Hickey means is an expansion of the period from seven years to 15 years. This Bill will operate for any houses built between now and 1960 and Senator Hickey wishes to extend the remission period.

You cannot do that in this Bill. An amendment to extend the period beyond seven years would be an amendment of the principal Act. It could not be done on this Bill.

Agreed to take remaining Stages now.

Bill passed through committee, reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."

I should like to point out to the Minister that this is a matter of a new house with a new valuation and any increase in the valuation in consequence of reconstruction is additional valuation. There would not be any increase, in my opinion in consequence of what Senator Burke and I suggested, an extension of the period from seven to ten or 15 years as the case might be.

The Minister said we wanted to make other people pay more rates. My feeling is that 90 per cent. of the people who are on the old valuations do not want to see people building new houses and having to pay in respect of very high valuations on these new houses. They do not want it. The old people do not feel that they should get a remission. I think the Minister misunderstands the point made by myself and Senator Walsh.

If I do, I accept the Senator's explanation.

Question put and agreed to.