The Gazette 1993

GAZETTE

MIWH

NOVEMBER1993

Rating Valuation in Ireland - The

Appeal System

Í by Tom O'Connor*

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-

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

Valuation Office (VO) under the

direction of the Commissioner of

Valuation who is appointed by the

Minister for Finance but has

independent status in the discharge of

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

Attorney General and Wexford County

Council,

1984 ILRM 355). The net

effect is that rates are now payable on

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.

Legislation

: The legislation governing

valuation work consists mainly of:

• 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

• two modern statutes of 1986 and

1988.

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

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.

| 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

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.

Appeals to Commissioner

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

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