Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The Commissioner of Valuation has sole responsibility for all valuation matters, including the method of valuation.
The annual rate on valuation (ARV), which is applied to the valuation for each property determined by the Valuation Office to obtain the amount payable in rates, is decided by the elected members of each local authority in the annual budget and its determination is a reserved function.
I am acutely aware of the pressures on small and medium-sized businesses at the present time. Local authorities have been asked by my Department to exercise restraint or, where possible, to reduce commercial rates and local charges for 2014. Local authorities have responded well to such requests in recent years and in 2013, 87 out of the 88 rating authorities have either reduced their ARV or kept it the same as in 2012. I expect the same positive response from the sector this year and the information obtained by my Department to date in respect of 2014 suggests this trend is continuing.
The Commissioner of Valuation, who has sole responsibility for all valuation matters, is conducting a programme of revaluation of all commercial and industrial properties throughout the State on a county by county basis. In a revaluation, the entire commercial valuation list for a local authority area is brought up-to-date by reference to values at a specific valuation date and the entire list is published on one date (usually 31 December) and comes into effect for rating purposes on 1 January the following year. The more recent revaluations of commercial properties completed by the Valuation Office were in respect of the areas of Dublin City Council, Waterford County Council, Waterford City Council and Dungarvan Town Council, and these have taken effect for rating purposes from 1 January 2014.
The essential purpose of a revaluation is to redistribute the burden of rates more equitably in line with relative changes in valuations across different classes of properties or individual properties within particular classes or uses. Revaluation results in more consistent and up-to-date valuations for rating purposes and provides a more equitable distribution of valuations across those liable to pay rates. This may inevitably result in an increase in the valuation of some commercial properties and a decrease in the valuation of others.
It is not the purpose of a revaluation to increase the total amount of commercial rates collected by local authorities. Section 8 of the Local Government (Business Improvement Districts) Act 2006 provides that I, as Minister, can make an order directing a rating authority to limit the overall amount of income it could raise through rates in the year following a revaluation to the total amount of rates liable to be paid to it in the previous year, adjusted for inflation. Rate limitation orders have been made in each of the local authorities that have undergone a revaluation to date, including most recently for Dublin City Council, Waterford County Council, Waterford City Council and Dungarvan Town Council.