The Commissioner of Valuation is independent in the performance of his statutory functions and the setting of valuations for rating is his sole responsibility. I have no function in relation to decisions in this regard. The Valuation Office is currently engaged in a national revaluation programme, on a phased basis, representing the first revaluation of that scale, encompassing all rating authority areas, in over 160 years.
Rates income is critical to meet the cost of services provided by local authorities. Local authorities 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 pursuant to the Valuation Acts 2001 to 2015. The annual rate on valuation (ARV) is applied to the valuation of each property, to obtain the amount payable in rates. The ARV is a reserved function decided by the elected members of each local authority in the annual budget.
My Department has in recent years requested local authorities to exercise restraint in setting ARVs and they have responded positively in this regard. The national average ARV has not changed significantly in recent years. The national average ARV decreased slightly each year from 2010 to 2015 and has increased only slightly each year from 2016 to 2019.
In overall terms, while economic activity has been expanding significantly in recent years, the overall rates income of local authorities nationally has remained relatively unchanged. The rates payable by individual businesses may change because of the impact of the revaluation programme being undertaken by the Commissioner of Valuation, or as a result of a stand-alone revision of a property's valuation.
Reasons for valuation increases may be that the valuation of some properties had not been revised to take account of improvements or extensions for some time, or where the valuations were historically low in comparison with the general level of valuations on the valuation list. In overall terms, I understand that of the revaluations conducted to date under the revaluation programme, approximately 60% of ratepayers have had their liability for rates reduced and approximately 40% have experienced an increase. Additionally, gradual rates harmonisation across new local authority areas, following the merger of town and county councils in 2014, may have led to increases in certain areas.
The revaluation provisions in the Valuation Acts 2001 to 2015 provide a modern statutory framework for the revaluation of all rateable property within a rating authority area so as to reflect changes in value due to economic factors, differential movements in property values or other external factors such as infrastructural changes in the vicinity of a property and changes in the local business environment.
Having up to date and consistent valuations, reflecting current market conditions, is critical to ensure that the levying of commercial rates is on a fair, equitable and consistent basis across all economic sectors and parts of the country and this is the core purpose of the national revaluation programme. The revaluation process includes comprehensive communication and appeals mechanisms.
In order to ensure that the revaluation promotes equity across sectors and areas, but is also a revenue neutral exercise in overall terms, the Minister may limit the total amount of rates collectable within the local authority in the year following a revaluation to that collected in the previous year, subject to minor adjustments.
In order to further improve the regime for the levying and collection of commercial rates, the recently enacted Local Government (Rates and Other Matters) Act 2019 will facilitate a more effective and streamlined rates regime. Included in the provisions of the Act are:
- provisions to allow ratepayers to pay rates by instalments or through a payment plan agreed with the local authority;
- schemes for the abatement of rates on vacant properties;
- provisions for the levying of interest on unpaid and overdue rates; and
- the rendering of unpaid rates to be a charge on relevant property.
Importantly, the Act includes provisions to allow a local authority to introduce rates alleviation schemes, which would include schemes to support the implementation of national and local priority plans such as the National Planning Framework or the Government's Realising Our Rural Potential: The Action Plan for Rural Development.