The Gazette 1993

GAZETTE

MIWH NOVEMBER1993

Rating Valuation in Ireland - The Appeal System

Í by Tom O'Connor*

commercial property only but, with a revenue yield of £275 million in 1992, such rates are a critical element in the financing of local authorities.

j Tom O'Connor, former | Commissioner of Valuation, explains rating and property ; valuation, and describes the operation of the Valuation Tribunal now in its fifth year of operation-

Legislation : The legislation governing valuation work consists mainly of:

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• the core legislation passed around the middle of the nineteenth century (the Poor Relief (Ireland) Act, 1838 and the Valuation Acts of 1852, 1854 and 1860. • adaptions under local government law to reflect the establishment of county councils and other institutional changes, and Computing valuation: The basis of valuation is the net annual value (NAV) - the 1852 formula which was reaffirmed in the Valuation Act, 1986. The NAV is derived mainly from the annual rent but other methods are sometimes used either as a cross-check on rental figures or as a substitute when rental information is not readily | available. Examples are (a) the j contactors' basis which estimates the ! capital cost of providing a premises allowing for depreciation and obsolescence and (b) the profits method which assesses its profit earning capacity. The theory is that those figures determine the rent which a hypothetical tenant would offer for the premises in its present state. In the absence of a revaluation the NAV is then reduced by a specified factor to maintain relativities with the rateable values (RVs) of similar properties. The factor in use in the Greater Dublin area is 0.63% which is based on pilot studies of relationships between current rents and RVs in selection areas in Dublin as at November, 1988. For example if the NAV calculated on a current rent is £50,000, the RV is £50,000 x 0.63/100-£315. • two modern statutes of 1986 and 1988.

Rating and Property Valuation

In Ireland the valuation of property for rating purposes dates from the mid- nineteenth century - the first countrywide tenement valuation was completed in the period 1853 to 1865. This task is the responsibility of the i Valuation Office (VO) under the direction of the Commissioner of Valuation who is appointed by the Minister for Finance but has j independent status in the discharge of j his duties. The Commissioner (James | Rogers) combines the functions of ; chief executive and the quasi-judicial function of adjudicating on appeals. The VO also advises the Revenue I Commissioners on property values for | capital taxation purposes and provides a property consultancy service for other public bodies. | Valuation base: Historically all land, buildings and other fixed property were rateable with exemption for property used for charitable, cultural or public purposes. However no rates have been charged on houses for domestic use since 1977 - the Local Government (Financial Provisions) Act, 1978 effectively terminated domestic rates. Rates on agricultural land ceased in 1984 following the Supreme Court judgment that the continued use of the 1852 valuations as a basis for agricultural rates violated property rights enshrined in the Constitution and that the basis for collecting such rates was therefore invalid (Brennan v Attorney General and Wexford County Council, 1984 ILRM 355). The net effect is that rates are now payable on

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| Appeals

The valuation cycle begins with listing a property for revision. An owner or occupier of any property, the local authority or an officer of the Commissioner may at any time apply for a revision of the valuation of a property whether the property is new j or already valued. All valuations are ; computed by professional valuers in the VO which compiles and issues the I findings on a quarterly basis. If ! dissatisfied with a revision, the owner I or occupier of the property concerned | or the rating authority may appeal to ! the Commissioner specifying the grounds of appeal. The decision of the Commissioner may be appealed to the Valuation Tribunal and there is a right of further appeal on a point of law to the High Court. At this first appeal stage there is no formal hearing. The Commissioner appoints a valuer other than the person who made the original valuation to inspect and report on the property. In arriving at his decision the Commissioner considers submissions from the appellant, the report of the 'appeal valuer', other studies on economic trends, market conditions or regional development Appeals to Commissioner

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