Dublin business owners were recently issued with new Proposed Valuation Certificates from the Commissioner of Valuation, as part of the revaluation process being carried out by the Valuation Office, with new rates effective from January 2014. Certificates were issued in tranches between October 23 and November 20, 2012, with final representations due on December 17. A further tranche will be issued on January 11, 2013.
The revaluation process is part of Dublin City Council’s rebalancing of rates, which amounts to approximately €300m in income for the local authority. It is the first time that a full general revaluation of commercial rates has been carried out in about 100 years in Dublin, and over 25,000 properties are being revalued.
The purpose of a revaluation is to bring more equity, fairness and transparency into the Dublin City Council rating system, and to bring it up to date to reflect recent changes in property rental values.
A revaluation is essentially the production of an up-to-date valuation list of all commercial and industrial property within a local authority area by reference to property rental values at a specified valuation date. Revaluation takes account of the relative changes in rental value between properties over time, and is the statutory means whereby all ratable valuations within a local authority are reassessed so that all ratepayers pay a fair share of the commercial rates income to be raised for the local authority.
The commercial rate liability is calculated by multiplying the ratable valuation, i.e., the current market rent on April 7, 2011, by a multiplier to be decided by the local authority. The final multiplier for Dublin City under the revaluation is not yet known but the draft figure currently in use is €0.264. While rents have undoubtedly declined since peak, it is likely that the rebalancing of rates liability between property types and the revised basis of assessment will impact on businesses, with current indicators being that office and retail units will be the most significantly affected with potential 50- 100% increases.
Understandably, business owners are likely to be frustrated by cases where their commercial rates liability has increased, despite the fact that other costs to their business have decreased. Indeed, in an era where Ireland needs to demonstrate competitiveness and support entrepreneurship and employment, keeping costs down is a necessity.
It should be stated that the revaluation is essentially to be a ‘revenue neutral’ exercise for Dublin City Council and will not result in an additional level of income for the Council than was previously collected.
The ratable valuation process is set out in the Valuation Act 2001 and does make the system more transparent for business owners. However, the impacts of the proposed Valuation (Amendment) (No 2) Bill 2012 will affect the entire process. Ratepayers should be aware that they can make representations to the Valuation Office with regard to their rates liabilities, but must make them within 28 days of the issue of their Proposed Valuation Certificate. Representations can be made directly or by an experienced and qualified rating professional who can provide independent advice and impartial representations to the Valuation Office.
The revaluation timeline is likely to be as follows:
1. October-November 2012: Ratepayers should have received a Proposed Valuation Certificate detailing the proposed new ratable valuation.
2. A ratepayer has 28 days from issue of the Proposed Valuation Certificate to make representations to the Valuation Office.
3. Final Valuation certificates will be issued at the end of 2013 and if the ratepayer is still dissatisfied with the ratable valuation, they may appeal to the Valuation Tribunal within 28 days following issue of the Final Valuation Certificate.
4. All final ratable valuations will be effective from January 1, 2014.
The Society has produced a ‘Guide to Revaluation and General Rates Assessment’, available on its website, to inform the public on some of the key aspects of the process.
The Society has also launched an App, available on iPhone and Android mobile phones, which enables the public to calculate their rating liability for 2012 and compare it to the previous two years, once they know their ratable valuation, which is available on the Valuation Office website – www.valoff.ie.
Rory is Chairman of the Valuation Professional Group
of the Society of Chartered Surveyors Ireland.