Revaluation of commercial rates ‘painfully slow’

Revaluations of the commercial rates businesses pay have only been completed by half of local authorities, with progress on a national review criticised as “slow” by the Comptroller and Auditor General.

The Valuation Office was tasked with conducting a national revaluation of commercial properties in 2001. But since then only 16 of the 31 councils have undergone reviews, the Public Accounts Committee (PAC) heard on Thursday.

The long period since the previous valuations means some ratepayers have faced large “spikes” in their bills if the commercial value of the property has increased, the committee heard. Rates are paid on commercial property to local authorities.

Fianna Fáil TD Shane Cassells said he had dealt with many cases where business owners have been "crippled" by four-fold increases in their rates following a revaluation.

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“That’s the kind of thing that can put a guy out of business fairly quickly,” he said, adding that the progress of national revaluation had been “painfully slow”.

Mr Cassells said more supports were needed to help businesses struggling with rates increases.

Chief executive of the Valuation Office John O’Sullivan told the committee a lot of the difficulties are being faced for the first time.

He said any dramatic increases in rates would likely be once-off, due to the current long period of time since many properties’ last valuation.

Extreme

Mr O’Sullivan said in general more than 60 per cent of ratepayers would “receive a benefit” in their rates bills as a result of revaluation process.

But there would be “extreme” cases of rates hikes during the national review.

He said the Valuation Office plan to have completed the process by 2021 and then commercial properties in local councils would be revalued every 10 years.

The pace of work has picked up since reforms in 2015 streamlined the appeals process for ratepayers, said Mr O’Sullivan.

The national revaluation of rates is separate from local councillors’ power to increase or reduce commercial rates by a given percentage each year.

Fine Gael TD Peter Burke criticised the Valuation Office for lengthy delays in assessing new companies, which resulted in many large firms paying no rates.

“You’re not going to have huge businesses running to you to get rated. We’re pushing the small ones hard, some bigger ones are getting away I feel,” he said.

The application of rates only applies from the date of the completed assessments and is not backdated.

Officials from the Department of Housing told the PAC new legislation was being brought forward to give local authorities the power to conduct preliminary valuations of new properties that set up, ahead of a formal assessment by the Valuation Office.

The planned legislation would also give local authorities more power to chase up unpaid rates bills. Currently, 84 per cent of rates are collected by councils, with department officials indicating collection rates would ideally be brought up to 96 per cent under stronger enforcement powers.