Ratepayers in third-generation Dublin office blocks built in or after the 1980s face a huge rise in rates next year, with those for "big glass boxes on Sir John Rogerson's Quay" in south docklands amongst the hardest hit, according to Lisney rating surveyor Tom Davenport.
Many retailers, especially those in areas such as Temple Bar, South Great George’s Street and the streets off Grafton and Henry Streets are also facing huge rate rises at the start of 2014 – rates for some have doubled and in extreme cases, trebled, according to valuers.
Some retailers around Wicklow Street/South William Street in Dublin city centre will be hit with rate rises of up to 80 per cent, says John Algar, senior surveyor with GVA Donal O Buachalla. In contrast, rates at Northside Shopping Centre in Donaghmede will fall by about 30 per cent.
However, retailers on Grafton Street and Henry Street, who feared large rises because of their high rental values, mostly feel they have been dealt with more than reasonably, say agents.
About 20,000 Dublin ratepayers – 99 per cent of the total – have received proposed valuation certificates by now, and the 28-day deadline provided for them to make representations to the Valuation Office has already closed. Forty per cent have done so, and the next nine months will determine the amount of appeals that come up at the end of 2013, when final valuation certificates are given, says Davenport.
There should be some recognition given to ratepayers' profitability and ability to pay, says Chambers Ireland, the body that represents Ireland's Chambers of Commerce – it will be arguing that this hardship clause should be included in valuation legislation currently going through the Oireachtas and expected to be law by this summer. Local authorities need to me mindful of the reality of the market, says Andrew Smyth of Chambers Ireland.
Disadvantage
While most businesses agree that the revaluation of property that began with new legislation in 2000 is long overdue, it is hitting some Dublin city ratepayers at a particularly difficult time.
Many, such as a shopkeeper on South William Street whose rates will double from 2014, hadn’t anticipated the rise and has missed the deadline to make representations to the Valuation Office. “I would hope I’ll survive, but it will be crippling.”
Some city ratepayers are concerned that changes in valuation law may put them at a disadvantage if they want to appeal the final cert they will get by the end of this year. Under existing valuation law, ratepayers have another 40 days to lodge an appeal after they get their final valuation certificate at the end of this year, and if still not satisfied, could take their case to a Valuation Tribunal.
But this appeal stage will be abolished if the Valuation (Amendment) (No 2) Bill 2012 is passed during the year – and ratepayers would have to take their case direct to a Valuation Tribunal. The Bill could be passed by the end of June.
If ratepayers' concerns are dealt with adequately at representation stage, this won't be an issue, says Mike Doyle, rating and property consultant with Bagnall & Associates.
However, he queries the fairness of a process started under one set of rules and concluded under another. The appeals stage represented a second opportunity for a ratepayer to argue against the valuation set by the Valuation Office, he says. Under the new law, the representations stage would be extended from 28 to 40 days.
In general, agents and bodies representing ratepayers believe the process governing long-overdue rates revaluation has been fair. However, ratepayers whose rates will double, or in extreme cases perhaps treble following revaluation, will likely want every opportunity to argue their case for a downward revision.
Rebalancing values
Declan Lavelle, head of valuation services in the Valuation Office, believes that the two-tier representation / appeals system proposed in the new legislation will be more efficient than the current three-tier process, which only began in 2002. The discussions at the first representation stage between valuation officers and ratepayers or their representatives "is where most engagement takes place. What can be agreed on or resolved is usually done at that stage. The whole thrust of the representation stage is to improve the quality of the final valuation list".
The valuation list is published at the end of the year and it is at this point that Dublin City Council will finally agree the multiplier which determines exactly what rates a business will pay. The whole process of revaluing commercial properties is aimed at rebalancing values, so that those with the highest rental values pay the highest rates. It is a revenue neutral exercise, with the local authority only permitted to get the same income following revaluation. This is what determines the final multiplier, which at the moment is expected to be 0.264, or 26 per cent of the rent; however, this could go slightly up or down.
The Society of Chartered Surveyors Ireland (SCSI) and Chambers Ireland are both generally happy with changes in the method of valuing commercial properties that began with the Valuation Act, 2001.
Characteristics
However, both have made representations to the Valuation Office and the Oireachtas Committee seeking changes to the Amendment Bill before it becomes law. It wants a proposal that would give the Commissioner of Valuation the right to solely determine by what method a property should be valued deleted from the draft bill. It also says that statistical methods of valuing property proposed won't take account of the many different characteristics of individual properties.
The society is calling for the retention of a first appeal procedure including a separate appeal valuer, “which reflects practice for the last 160 years”. It also wants a widening of the definition of “a material change in circumstances” to include a change in economic circumstances beyond the occupier’s control.
