The Valuation Acts 2001 to 2015 provide for the valuation of all commercial and industrial property for rating purposes. The Commissioner of Valuation is independent in the performance of his functions under the Acts and the making of valuations for rating is his sole responsibility. I, as Minister, have no function in decisions in this regard.
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 in any calendar year is a product of the valuation set by the Commissioner of Valuation, multiplied by the Annual Rate on Valuation (ARV) decided annually by the elected members of each local authority.
Having a modern valuation base is very important for the levying of commercial rates on a fair and equitable basis across all economic sectors. The Valuation Acts provide for the revaluation of all rateable property within a rating authority area so as to reflect changes in value due to economic factors such as business turnover, differential movements in property values or other external factors and changes in the local business environment.
A valuation for commercial rates purposes is arrived at by estimating the Net Annual Value (NAV) of the property in question, 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 classes of business on a nationwide basis including service stations with and without convenience stores or car washing facilities.
Estimating the NAV of a rateable property is an evidence-based exercise. I am informed that, during a revaluation, the Valuation Office analyses relevant market rental transactions for all rateable properties, in accordance with the legislation, best practice internationally as set out in published Practice Guidance Notes, well-established valuation principles and case law arising from the independent Valuation Tribunal and the higher Courts. The conclusions drawn from that analysis are applied to similarly circumstanced property using the “comparative” method of valuation, which employs direct comparison with other similar properties.
All valuations determined for rating purposes under Part 5 of the Valuation Acts 2001 to 2015 must reflect open market rental values at the valuation date specified in the relevant Valuation Order made by the Commissioner of Valuation, and must also endeavour to be correct, equitable and uniform. These are fundamental principles of any modern system of rateable valuation. I am informed by the Commissioner of Valuation that no anomaly exists in the approach to the valuation for rating purposes of the retail elements of service stations. The market data and financial information analysed by the Valuation Office since the first revaluation was conducted in 2005 suggests that the valuation approach adopted in relation to service stations is reflective of the open market and compatible with the statutory requirements of Part 5 of the Valuation Acts. I understand that this has also been affirmed as the appropriate approach in a number of recent Valuation Tribunal decisions.
There are a number of avenues of redress for an occupier of rateable property who is dissatisfied with a determination of valuation made under the provisions of the Valuation Acts, 2001-2015. Firstly, before a determination is made, there is a right to make representations to the Valuation Office in relation to a proposed valuation. Later in the process, if the occupier is still dissatisfied with the determination, there is a right of appeal to the Valuation Tribunal which is an independent body set up for the purpose of hearing appeals against determinations of the Valuation Office. There is also a right of appeal to the Higher Courts on a point of law. Appeals are made on an individual case basis. However, the decision in one case can have relevance in other similar cases.