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 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. The purpose of a revaluation is to distribute commercial rates liabilities more equitably among ratepayers based on up-to-date values. Following revaluation, there will be a much closer relationship between rental value and commercial rates liability. Even though property values have fallen generally, some ratepayers will gain while others will lose from the process of redistribution but, overall, revaluation results in a fairer distribution of the rates burden.
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 amount of rates payable by a ratepayer in any calendar year is a product of the valuation of that property determined by the Valuation Office and the annual rate on valuation (ARV) set annually by the elected members of the rating authority. Revaluation is the mechanism whereby movements in property valuations as a result of economic factors are reflected in valuation lists. Following the first revaluation in each area, the Valuation Act 2001 provides for subsequent, recurring revaluations to be carried out at intervals of a minimum of 5 years and no later than 10 years. Accordingly individual valuations are fixed for a 5-10 year period. On the other hand the ARV can, as determined by the elected members of the rating authority, vary from year to year and therefore so can the amount of rates payable annually.
Valuations reflect the value of all individual properties in particular rating authority areas at the statutory valuation date (28th October 2011 for Waterford). Movements in valuations since the last date by which valuations were set (1988) reflect the relative changes to rental values within and between sectors such as retail, industrial and hospitality between 1988 and 2011. Accordingly some businesses will have an increase in their rates liability while others will experience a decrease following revaluation.
In relation to particular cases there is a well established statutory process whereby a ratepayer, if he or she considers that the proposed valuation or any of the details contained in the Proposed Valuation Certificate are incorrect, can make representations to the Valuation Manager.
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.
The application of a moratorium to a revaluation because of local authority amalgamation considerations is not provided for under the Valuation Act, 2001, as the application of such an option would not affect the valuation process. 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.
