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.
The Deputy may be aware that, under the relevant legislation, 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 on a nationwide basis.
Estimating the NAV of a rateable property is an evidence-based exercise. 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, as the name implies, employs direct comparison with other similar properties.
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 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.
There is no provision in the legislation for taking a “class” or group appeal before the Tribunal, as each case is considered on its individual merits and by reference to the specific circumstances of the property. However, individual appellants can make arguments to the Valuation Tribunal in relation to their concerns about the overall valuation methodology adopted by the Valuation Office for a specific category of rateable property.
Notwithstanding this, I am informed that it is possible for a Test case to be heard by the Valuation Tribunal. In order to proceed with a Test case all parties involved must agree that such an approach is appropriate. In addition, such a process must be entered into on the clear understanding that the determination of the Valuation Tribunal in the Test case would set a precedent which would without exception apply to the remaining cases identified as being part of the test case series and only these cases. All cases involved would have to be similarly circumstanced. A Test case would be identified and nominated through mutual agreement. This particular case would then be heard by the Valuation Tribunal.
The need for attention to detail and confirmation of such cannot be underestimated in the use of a Test case. The determination of the Valuation Tribunal would be applied to the nominated Test case and all other cases identified as being part of the Test case series and only these cases. The Valuation Tribunal would be advised in advance that the case being heard was a test case and would be relevant for these other cases. The right of appeal to the Higher Courts on a point of law for either the appellant or respondent still applies in a Test case situation.
