Commercial rates reform delay

Reform of the system of calculating commercial rates is not going to be completed by 2010 as hoped, and will now take considerably longer than the five years allocated for the project, according to a report from Comptroller and Auditor General John Purcell published yesterday.

The report on the State's Valuation Office also found that while efficiency in the office increased by about 35 per cent in the five years to 2006, there remained an 18-month backlog in valuations required by State agencies.

In addition to providing valuation services to government agencies, including the Revenue Commissioners who use them to calculate capital gains and capital acquisitions taxes, the Valuation Office also supplies a rateable valuation on more than 188,000 commercial properties across the State.

Local authorities use these rateable valuations to calculate how much individual businesses pay each year in rates.

But as the last comprehensive valuation of all properties in Ireland was undertaken between 1852 and 1865, the valuations office and local authorities have had difficulties putting in place a system which would deliver the council finance and be fair and equitable to contributors.

In an at times highly critical assessment of the services provided by the Valuation Office, the report concluded that a new comprehensive rateable valuation would not be ready within the hoped-for timeframe of five years.

It also concluded that the backlog of valuations - extending to 18 months in 2006, the latest year assessed - had the potential to undermine the efforts of government agencies including the Revenue Commissioners which regularly seek valuations of properties for tax calculation purposes.

The Comptroller and Auditor General also noted that while the agreed staffing level of the valuations office at the end of 2006 was 180, significant difficulties in recruiting and keeping staff meant there were only 155 employed. But it further noted that of these 155 staff the "whole-time equivalent" was just 148.

This means that in 2006 the office lost seven staff years through illness, leave-taking for maternity, family-friendly policies or staff courses and suchlike.

But Mr Purcell did praise the quality of work of the office in relation to updating valuations, which he said had almost eliminated "an appeals culture on the part of property owners".

The Valuations Office is working with local authorities on the update but the report noted that only two had been completely reassessed by the end of 2006 - South Dublin and Fingal county councils.