Every commercial, industrial and some other non-domestic properties are subject to commercial rates, an annual charge to pay for the general provision of services of local authorities. Rates are calculated by local authorities based on valuations provided to them by the Valuation Office.
Traditionally there hasn’t been a close relationship between the rental value / valuation of property and its commercial rates liability. To change this and bring more equity and fairness into the rating system, the Valuation Office has conducted a National Revaluation Programme which is well underway at this stage, proposed valuation certificates are expected to be issued in early March. The proposed new rates for all commercial properties are due to take effect from 2018 which will bring rates in line with Market rent not the historical rating system.
The main question we at O’Neill & Co are being asked is how this revaluation will affect the rates liability of commercial property owners. Unfortunately, until all properties in your local area have been revalued the answer can’t be definitively given. Your liability may increase, decrease or remain unchanged. Rates going forward are based on the revaluation of your property multiplied by the Annual Rate on Valuation (ARV), which is set by the local authority.
The easiest way to demonstrate the amended rating system is by giving you an example. Let’s assume we have 3 properties, all starting out with the same commercial rate liability. Their property value determined by the revaluation varies. Based on the newly set ARV the new rate liability has also changed. Please note that this is just an example and the new ARV has not yet been announced.
|Property A||Property B||Property C|
|Rates Liability before Revaluation||€4000||€4000||€4000|
|Valuation following Revaluation||€13,000||€16,000||€18,000|
|Assumed ARV set by local authority after Revaluation||0.25||0.25||0.25|
|Rates Liability after Revaluation||€3,250||€4000||€4,500|
|Change in Rates Liability due to Revaluation||– €750||No change||+ €500|
Example courtesy of Valuation Office
The Revaluation Programme is not designed to increase the overall commercial rates income for local authorities. Its purpose is rather to help distribute rate liabilities more equally between payers and align it with property values.
Should you be unhappy with the new proposed valuation certificate you have 40 days (from date of issue) to make representations. The Valuation Office will consider your objections and will issue a final valuation certificate. If you should still have objections to the final certificate you have the right to appeal to the Valuation Tribunal, an independent body set up to settle disputed valuations.
The National Revaluation program is a good step towards bringing more fairness into the commercial rate liability system.
The programme affects all owners of commercial property. If you are concerned or have question regarding this process, how your rates will be affected and what steps you can take to appeal the new certificate Darac from O’Neill & Co can offer advice in this area. O’Neill & Co provide a specialised rating service should you wish to discuss any aspect, please don’t hesitate to contact us on 045 856604.