As the Deputy will be aware, under the valuation legislation (Valuation Acts 2001-2015), the Commissioner of Valuation, who is a statutory officer and Head of the Valuation Office, has sole responsibility for the maintenance of valuation lists of all commercial properties in the State which are used by all local authorities in the calculation of rates and I, as Minister, have no function in this regard.
The basic premise under valuation legislation is that all buildings and lands used or developed for any purpose, including private nursing homes, are rateable unless expressly exempted under Schedule 4 of the Valuation Act 2001 as amended. Those exempt properties would ordinarily include those that meet the criteria set out in Paragraph 14, Schedule 4 of the Valuation Acts 2001 to 2015. Paragraph 14(a) provides for exemption from rates for nursing homes occupied by a body which is not established, and the affairs of which are not conducted, for the purpose of making a private profit. Paragraph 14(b) provides for exemption from rates for nursing homes occupied by a body whose expenses in carrying on the activity are defrayed wholly or mainly out of monies provided by the Exchequer, other than where such defrayal occurs by reason of the Nursing Homes Support Scheme Act 2009.
A valuation of a private nursing home for commercial rates purposes is arrived at by estimating the Net Annual Value (NAV) of the property, at a specified valuation date. The term “net annual value” has a legal definition and is set out in section 48 of the Valuation Act 2001 as the rent for which, one year with another, the property might, in its actual state, be reasonably expected to let from year to year, on the assumption that the probable average annual cost of repairs, insurance and other expenses (if any) that would be necessary to maintain the property in that state, and all rates and other taxes payable in respect of the property, are borne by the tenant. This definition of Net Annual Value is applied to all rateable properties and on a nationwide basis.
Estimating the NAV of a rateable property is an evidence-based exercise. In this regard, I am informed that the Valuation Office analyses relevant market rental transactions for all rateable properties including nursing homes in accordance with the legislation, best practice internationally as set out in Practice Guidance Notes from the Royal Institute of Chartered Surveyors (RICS), well-established valuation principles and case law arising from the independent Valuation Tribunal and the higher Courts and the conclusion drawn from that analysis is applied to similarly circumstanced property using the “comparative” method of valuation which, as the name implies, employs direct comparison with other similar properties. Specifically with regard to the valuation of nursing homes, the number of bed places in the facility, which when taken with other individual circumstances, would be a determining factor in arriving at the net annual value and this is a consistent approach used on a nationwide basis.
The position regarding the determination of rates under Irish law is that 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 particular 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 each local authority. Whereas the setting of valuations is the responsibility of the Valuation Office (subject to the appeal provisions in the legislation), the annual setting of the ARV is a reserved function of the elected members of each Local Authority and the Commissioner of Valuation has no function in that regard. Accordingly, details on the amount of rates levied on nursing homes are not available to the Valuation Office or to my Department. Regarding the examination of rates nationally to ensure a consistent approach, the position is that while the basis of valuation is consistent across the country, the ARV can fluctuate to some degree, depending on the local authority area in which the nursing home is located. This is a function of local government and reflects the local circumstances surrounding the adoption of the ARV in each local authority and relates to the budgetary position which the elected members of the Council must address annually in their determination of the ARV for which they have exclusive responsibility.
