Aengus Ó Snodaigh
Question:124. Deputy Aengus Ó Snodaigh asked the Minister for Jobs, Enterprise and Innovation the steps he has taken to address the property costs to small and medium enterprises. [18620/13]
View answerTuesday, 23 April 2013
Questions (124)
Written answers
The recently published Forfás report "Costs of Doing Business in Ireland 2012" indicates that property costs in Ireland have reduced significantly in recent years. Construction costs and rental costs for both office and industrial space have fallen dramatically for new businesses, since the collapse of the property bubble. Rental costs for new leases of office space in Dublin, for example have decreased by 45 per cent between 2007 and 2011. Of course, I recognise that many existing businesses are tied into higher property costs having purchased or leased property with upward only rent review clauses during the property boom.
The Government has taken steps to address the issue of upward only rent reviews where possible. In the Action Plan for Jobs 2012, the Government undertook to place downward pressure on commercial rents where the National Asset Management Agency (NAMA) had acquired the loan on the underlying property. I understand that by the end of 2012, NAMA had received 276 eligible applications for rent abatement and had granted 212 applications with an aggregate annual value of €13.5 million. A further 56 applications were under review. Of the 276 eligible applications received, only 8 were refused. Other property related costs such as stamp duty on transactions have recently been reduced. Local Authority rates have fallen marginally in the past three years and we will continue to encourage Local Authorities to exercise restraint in setting commercial rates and, where possible, to reduce rates.
The 2013 Action Plan for Jobs includes a number of specific actions to be implemented to support a sustainable commercial property market. These include:
- Ensuring that the commercial leases database is established and fully operational in 2013.
- The completion of a review of the Rent Review Arbitration Code to consider the effectiveness of the code in resolving disputes over rent reviews, and the degree to which stakeholders are making use of the code and to
- Enact and implement the Valuations Bill in order to accelerate the revaluation of properties for commercial rates purposes.