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Written Answers - Valuation Office

Tuesday, 27 March 2012

Dáil Éireann Debate
Vol. 760 No. 3

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 258.  Deputy Brendan Smith Information on Brendan Smith Zoom on Brendan Smith  asked the Minister for Public Expenditure and Reform Information on Brendan Howlin Zoom on Brendan Howlin  if he will clarify the situation in relation to general revaluation currently ongoing by the valuation office; the purpose and reason for same if requested by Government; if he will outline local authorities which have been completed and which are in progress; if the programme is on schedule or the action that can be taken to speed the process up; also in relation to local authorities completed, if a summary of findings can be outlined; if revaluations decided are in respect of individual properties or categories of property; if there have been any consistencies in the changes recommended particularly as between categories of properties; if same will be outlined; if he will clarify the original remit, if overall rate base can be reduced or if purpose is to reconfigure same; and if he will make a statement on the matter. [16919/12]

Minister for Public Expenditure and Reform (Deputy Brendan Howlin): Information on Brendan Howlin Zoom on Brendan Howlin The work of the Valuation Office is underpinned by The Valuation Act 2001, which provides for the valuation of all commercial and industrial property. The Commissioner of Valuation is independent in the performance of his functions under the Act, and the making of valuations for local authority rating is his sole prerogative. In accordance with the 2001 Act, which came into force on 2nd May, 2002, a national programme is being rolled out progressively for the revaluation of all commercial and industrial properties in the State.

The revaluation programme aims to provide up-to-date valuations for individual properties across all economic sectors that are subject to local authority rates. It is an important programme, especially given the significant changes in values and rents following the economic downturn of recent years. The revaluation process is the mechanism whereby economic changes that take place in the property market are reflected in the valuation lists for rates purposes and in individual ratepayers’ rates liabilities. The purpose of a revaluation is to redistribute commercial rates liabilities among ratepayers based on up-to-date values. Following revaluation, there will be a much closer relationship between rental value and commercial rates liability. Even though property values have fallen generally, some ratepayers will gain, while others will lose from the process of redistribution but, overall, there will be a fairer distribution of the rates burden. In general, however, more ratepayers have gained than lost in the revaluations carried out to date. A table illustrates the changes that have occurred in the areas already valued:

Local Authority Area Ratepayers with a reduced rates liability following revaluation Ratepayers with an increased rates liability following revaluation New Property Valuations
South Dublin County 49% 39% 12%
Fingal County 65% 30% 5%
DunLaoghaire- Rathdown 54% 46% 0%

It is not the purpose of a revaluation to increase the total amount of commercial rates collected by local authorities. In fact, the relevant legislation (Valuation Act 2001 and the Local Government Business (Improvement Districts) Act 2006) provides that the commercial rates income of local authorities in the year following a revaluation is capped and cannot be increased, while there is no impediment to a decrease in the rates income under the legislation. The only increase in the total rates income of a local authority permitted in the year following publication of the new Valuation List is an increase for the rate of inflation.

The redistribution of the rates liability following revaluation is a function of market conditions at the date of valuation and the composition of the valuation list in terms of property type. Therefore, the trend of reduced or increased rates liability in certain sectors in the revaluations to-date may not be replicated in the revaluations of other areas.

The revaluation programme, which has been completed in three County Council areas in Dublin, began in November 2005 in the South Dublin County Council area and has since been rolled out to the areas covered by Fingal and Dún Laoghaire-Rathdown County Councils. The revaluation of South Dublin was completed in December 2007, Fingal was completed in 2009 and Dún Laoghaire-Rathdown was completed in 2010. The revaluation of Dublin City Council area was launched on the 5th May 2011 and the Commissioner signed valuation orders on 12th January, 2012 to commence the revaluation of the three local authority areas in Waterford. In addition, he has recently concluded consultations with the local authorities in Limerick and expects to sign valuation orders extending the revaluation programmes to these areas very shortly. It is intended to extend the revaluation programme to further local authority areas as soon as it is practicable to do so but it is not possible at present to say where these areas will be.

While the extension of the project to Dublin City is the major current focus, the Commissioner has expressed his concern that the present rate of progress may not allow the Office to complete the job nationally within the ten years from 2008 to which the Office previously committed.

The Valuation Office is actively pursuing ways to accelerate the revaluation programme. The Commissioner has indicated that, following detailed examination of various possibilities over the past year, the Office has concluded that it may be feasible to introduce a self-assessment approach, accompanied by appropriate controls, and that it might be possible also to outsource some of the work. As well as helping to speed up the national programme, an element of outsourcing, if it proves practicable, would allow comparison of the Valuation Office productivity and costs with those in the private sector. The enabling provisions to allow for these changes are included in proposals for amending legislation currently being drafted by the Parliamentary Draftsman and, subject to the enactment of the legislation; I understand that the intention would be to initiate pilot revaluations in two local authority areas using the new methodologies.

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