Members of the Dáil’s public spending watchdog have expressed concern that a programme to revise the value of all commercial properties across the country will drive many struggling retailers out of business.
The head of the Valuation Office, which is overseeing the nationwide project, admitted yesterday that many retailers are likely to face an increase in rate charges once their area has been reviewed, while many industrial premises are expected to see their rates fall or remain static.
The Commissioner of Valuation, John O’Sullivan, told the Dáil Public Accounts Committee that an analysis of evidence on rents had indicated the prices paid for retail properties had moved ahead of those for industrial and office premises in relative terms.
Mr O’Sullivan said the revaluation of rates in three of the four local authority areas in Dublin has already been completed, while a similar exercise for Dublin City Council and Waterford is due to be finished by the end of 2013.
Mr O’Sullivan said such work would represent around 50% of all areas in monetary terms. The entire project has a deadline of 2018. Despite criticism, he claimed there was a compelling argument for such a programme as existing rates were based on market conditions which prevailed in 1988.
However, Fine Gael TD John Deasy said the whole review was self-defeating as many traders would find any increase on the current level of commercial rates unsustainable.
The Waterford deputy highlighted one case of a clothes shop owner in Dungarvan who is due to see his annual rates bill increase from €800 to €9,000.
Mr Deasy warned that such increases would lead to unemployment and a lack of job growth with a consequent effect on the State’s own finances.
Local authorities rely on commercial rates for approximately 26% of their income.
Around €1.4bn on average is collected in commercial rates each year.
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