Tuesday, 25 June 2013

Questions (325, 326, 327, 328, 329)

Paudie Coffey

Question:

325. Deputy Paudie Coffey asked the Minister for Public Expenditure and Reform if he will outline the basis for deciding which councils should be revalued and the reason certain councils were chosen over others; and if he will make a statement on the matter. [30733/13]

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Paudie Coffey

Question:

326. Deputy Paudie Coffey asked the Minister for Public Expenditure and Reform if he will consider an amendment to the Valuation (Amendment) (No. 2) Bill 2012 similar to section 20 (5) of the Finance (Local Property Tax) Act 2012, that would impose limitations on the amount by which commercial rates could be raised or reduced; and if he will make a statement on the matter. [30734/13]

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Paudie Coffey

Question:

327. Deputy Paudie Coffey asked the Minister for Public Expenditure and Reform the reason rateable areas (details supplied) in County Waterford were included by the Valuation Office in the revaluation process in view of the fact that they will cease to exist next May; if this will then mean that the valuation process will have to begin again for these former rateable areas; and if he will make a statement on the matter. [30735/13]

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Paudie Coffey

Question:

328. Deputy Paudie Coffey asked the Minister for Public Expenditure and Reform if he will consider an amendment to the Valuation (Amendment) (No. 2) Bill 2012 similar to Part 12 of the Finance (Local Property Tax) Act 2012, that would allow for businesses to avail of a deferral system for businesses that cannot afford to pay their annual rates bill; and if he will make a statement on the matter. [30736/13]

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Paudie Coffey

Question:

329. Deputy Paudie Coffey asked the Minister for Public Expenditure and Reform if he will consider a self-assessment valuation for commercial premises similar to that introduced for residential properties in the Finance (Local Property Tax) Bill 2012; and if he will make a statement on the matter. [30737/13]

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Written answers (Question to Public)

I propose to take Questions Nos. 325 to 329, inclusive, together.

The Government approved the publication of the Valuation (Amendment) Bill, 2012 on 3rd August, 2012 and the 2nd stage debate was taken in Seanad Éireann on 11th October, 2012.

Revaluation of all rateable properties across the State is a priority for Government and is a feature of the Action Plan for Jobs 2012. The primary purpose of the Bill is to introduce amendments to the current legislation which underpins the rateable valuation system on which commercial rates are calculated by rating authorities. The proposed amendments to the Valuation Act 2001 are designed to accelerate the valuation process and include new features which provide for the streamlining of the valuation appeals procedures available to ratepayers. As part of the efforts to accelerate the revaluation process, the legislation will also provide the legislative basis for carrying out a revaluation based on self-assessment by ratepayers and also for the external delivery of elements of the valuation process.

The national revaluation programme aims to provide up-to-date valuations for individual properties across all economic sectors that are subject to local authority rates. It is an important programme, especially given the significant changes that have occurred in rental values following the economic downturn of recent years. The revaluation process is the mechanism whereby economic changes that take place in the property market are reflected in the valuation lists for rates purposes and in individual ratepayers’ rates liabilities.

Under Irish law, there is a distinct separation of function between the valuation of rateable property and the setting and collection of commercial rates. The Valuation Act, 2001 sets out the procedures and basis for assessing the valuation of properties for rates purposes. The Act does not deal with liability for rates, including the ability or otherwise of ratepayers to pay the rates, which is an area covered in rating and local government law and which falls outside the jurisdiction of the Commissioner of Valuation. The levying and collection of rates are matters for each individual local authority and do not come within the remit of the valuation system which is solely concerned with the determination of property valuations. Therefore, it is not proposed to include a provision in the Valuation (Amendment) (No.2) Bill, 2012 which would affect the operation of the rates collection system.

With regard to the possibility of introducing an element of self-assessment by ratepayers to the valuation process, the Commissioner of Valuation has concluded that this may be a viable option and is arranging for a pilot scheme to test this methodology in one rating authority area. However, for the pilot to proceed, a suitable amendment to the Valuation Act, 2001 is required and therefore, it is proposed in the amending legislation to provide the statutory basis which will allow the Commissioner to initiate such a pilot scheme, which if it proves successful could be extended to other rating authority areas as part of the strategy to expedite the delivery of the revaluation programme.

The current national revaluation programme will result in all rateable properties in all rating authority areas across the State being revalued. The criteria for the sequencing of rating authority areas for revaluation and in particular the selection of the three rating authority areas in Waterford, i.e. Waterford City Council, Waterford County Council and Dungarvan Town Council, was based on a number of factors such as the relevant size of the jurisdictions of the rating authorities, the number and concentration of rateable items in a rural/urban setting and the range of industrial and commercial properties which would be generally representative of all economic business sectors. The degree of interface and overlap of the three rating authorities was also a relevant factor as it was considered prudent to carry out a revaluation simultaneously in all these rating areas as the City of Waterford straddles a large rural hinterland which if it was not revalued as part of the programme would have resulted in the creation of certain valuation anomalies at the border interface between the City and County. Once a decision was made to revalue all commercial and industrial properties in Waterford City and County, it would have been incongruous to exclude the properties in the Dungarvan Town Council area from the programme.

The Government’s Action Programme for Effective Local Government, Putting People First, indicates that in the context of reorganisation of local governance structures, the proposed new municipal districts will provide an opportunity to achieve a more coherent approach to rates and charges on a county-wide basis, having regard to funding requirements and the need to support employment and business competitiveness.

The Action Programme proposes rates harmonisation to cater for differences between Annual Rates on Valuation (ARVs) of towns and counties. The approach of the Minister for the Environment, Community and Local Government to rates harmonisation will seek to ensure, that harmonisation does not lead to significant net loss of revenue in individual counties with consequential implications for services, and that any change in rates does not impact negatively on businesses and employment. It is important that local government reform drives down costs to business in order to protect existing jobs and sustain our economic competitiveness.

Definitive details, arrangements and procedures in relation to the funding of district level functions, and financial relationships between district and county levels, will be developed in the context of the new local government funding arrangements generally, implementation of the new sub-county system and preparation of the legislation in relation to the reform programme.

In keeping with the principle of separation of function between the valuation of rateable property and the setting and collection of commercial rates the imposition of limits on the amount of rates that a rating authority can raise is generally a matter for decision by the Minister for the Environment, Community and Local Government and does not come within the competence of the Commissioner of Valuation whose sole responsibility lies in administering the system of rateable valuation as underpinned by the Valuation Act, 2001. However, in so far as the valuation legislation is concerned, there is a specific provision in the 2001 Act which allows the Minister for the Environment, Community and Local Government to make an order requiring a rating authority to exercise its powers to make rates in such a manner that it does not exceed the amount of rates liable to be paid to it in the first year following a revaluation except for any increase determined by the consumer price index.