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 Acts 2001 to 2015. The Commissioner of Valuation has responsibility for valuation matters. The annual rate on valuation (ARV), which is applied to the valuation of 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.
Rates income is a very important contribution to the cost of services provided by local authorities such as roads, public lighting, development control, parks and open spaces. Locally elected members adopt the annual rate on valuation they consider necessary in order to provide the required services.
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 slightly each year from 2016 to 2018.
As provided for under section 66 of the Local Government Act 2001, local authorities may decide to offer assistance or money in kind in order to promote the interests of the local community, which includes, inter alia, the economic or general development of the administrative area (or part of it) of the local authority concerned. Also, local authorities work closely with ratepayers experiencing difficulty in the payment of commercial rates. In this regard, local authorities facilitate the payment of commercial rates by instalments, and work with businesses to put in place flexible payment options that reflect capacity to pay.
The principle of local authorities levying rates based on an independent valuation is well established, and I have no plans to change this. However, the legislative basis for the levying of rates is spread over a number of enactments, some dating back to the 19th century. My Department has developed legislative proposals to modernise and consolidate the legislation governing commercial rates, and last year the Government approved the drafting of a rates Bill. Among the measures included in the General Scheme of the Bill are provisions to allow a local authority to introduce rates alleviation schemes to support the implementation of policy objectives, including: local economic and community plans; objectives contained in development plans and local area plans; and national planning policies. A draft Bill has been prepared by the Office of the Parliamentary Counsel and, subject to Government approval, it will be published shortly.
