Dáil Éireann Debate, Tuesday - 15 November 2016
73. Deputy Shane Cassells asked the Tánaiste and Minister for Justice and Equality her plans to have the issue of commercial rates exemption extended to all child care facilities in order to improve the sustainability of centres and offer a pathway to reduce costs on parents; and if she will make a statement on the matter. [33533/16]
View answerI can inform the Deputy that the Commissioner of Valuation is independent in the exercise of his duties under the Valuation Acts 2001- 2105 and the making of valuations for rating purposes is his sole responsibility. I, as Minister for Justice and Equality, have no function in decisions in this regard.
The Valuation Act 2001 as amended by the Valuation (Amendment) Act 2015 provides that all buildings used or developed for any purpose, including constructions affixed thereto, are rateable unless expressly exempted under Schedule 4 of the Act. Such exempt buildings would principally include those used for public worship, education and health care provided on a not-for-profit basis, and charitable purposes. In general, the Act maintains the long-standing position that all commercial properties - including all private childcare facilities such as play schools, pre-schools, crèches and Montessori schools - are liable for rates.
I understand that inconsistency in the approach to the exemption from rates for childcare and education facilities and calls to exempt all such providers were among the issues raised at a number of stages during the passage of the Valuation (Amendment) Act 2015. As a result, the Government approved an amendment to the Bill, to insert into Schedule 4 of the Valuation Act 2001 an exemption from rates for properties occupied by parties that provide early childhood care and education on a not-for-profit basis. This extension of the childcare and education exemption removed an anomaly that previously existed where those that provided childcare and education on a charitable basis were exempt but those that did so on a not-for-profit basis were not. Since the commencement of the Valuation (Amendment) Act 2015, the Valuation Office has been updating the valuation lists to give effect to this extension of the exemption so that it became effective for qualifying providers in 2016.
The decision taken by Government to extend the exemption from rates for early childcare and education was taken having considered the views of stakeholders in the sector. As outlined in Oireachtas debates during the passage of the legislation, key valuation principles have to be respected to retain the integrity and equity of a system that is a significant source of funding for Local Authorities. One of those principles is that properties of occupiers that operate with the intention of making a profit are rateable. There are a variety of other more appropriate means through which Government can and does support the provision of such services. Making exception to core, long-standing valuation principles can have a far reaching negative impact on the rates system and consequently a far reaching impact on Local Government funding.
In addition to the exemption of those that provide childcare and early education on a not-for-profit basis, paragraph 10 of Schedule 4 of the Valuation Acts 2001 to 2015 also exempts from rates childcare facilities that only provide the Early Childhood Care and Education Scheme.
The Acts are quite specific about the range of exemptions that can be allowed by the Commissioner, who has no discretionary latitude to grant exemptions not covered by Schedule 4. As a matter of course, the Valuation Office examines all claimant cases on their individual merits by reference to the relevant statutory provisions governing the operation of the Valuation Acts as they relate to pre-school childcare facilities and all other categories of properties.
Regarding the payment of rates by individual ratepayers, the Deputy will be aware that 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 set by the Valuation Office multiplied by the Annual Rate on Valuation (ARV) decided annually by the elected members of the local authority. The latter is a reserved function of the elected members and the Commissioner of Valuation has no function in this regard.
Private childcare facilities which are operated for profit, form part of the rateable valuation base on a nationwide basis. The exemption from rateability of such facilities would reduce local authority revenues, which if it were not to entail an increase in Exchequer funding of local authorities, would have to be made good by imposing a corresponding increase on the remaining ratepayers. Accordingly, there are no plans at this time to extend the exemption from rates to for-profit childcare facilities, which as I have indicated would represent a significant departure from core valuation principles. However, the Deputy will be aware of the wide range of measures being pursued by my colleague the Minister for Children and Youth Affairs in relation to the childcare sector.
