HSE chases multi-million rates-free windfall

THE Health Service Executive will be in the High Court today in a fight for special rates-free status on its property — a potentially lucrative precedent for hundreds of publicly owned sites.

Last year the HSE won a multi-million-euro test case at the Valuation Tribunal based on an office building in Castletroy, Co Limerick.

A judicial review was then independently sought.

It is likely this case will end up with the Supreme Court, irrespective of how the motion before Mr Justice Frank Clarke eventually pans out.

The Valuation Office said this was because it had ramifications far beyond the HSE’s portfolio of properties and may impact on valuable sites across the country.

The Office’s appeals manager Jim Gormley said many organisations under the umbrella of central government could be affected.

“This is an agreed test case between the HSE and the Valuation Office. However, the case is likely to have significant implications beyond the HSE, regardless of the outcome,” he said.

The HSE has already convinced the tribunal that when it absorbed the old health boards, it became a national body and an agent of the State — earning it special rates status.

Crucially, this ruling would apply to all non-profit HSE buildings, including non-hospital offices.

The Irish Examiner has examined all 98 HSE properties listed on the Valuation Office’s online register.

An analysis of these — with the unique rate applied by each local council — revealed the HSE’s bill was €2.9m last year.

The Valuation Office does not have the total number of HSE properties but expects the ruling to affect “a few hundred sites”.

The HSE said it will not comment while it was before the court.

Traditionally state bodies do not pay rates but local agencies like county councils do.

The HSE’s assistant national director of finance, Patrick McDonald, told the tribunal it is no longer an amalgamation of regional health boards. Its senior counsel Brian Murray said the organisation had unique status like a government department.

“Mr Murray submitted that the HSE could reasonably be said to fall within the definition of a department of state which carries out functions at the heart of central governance of the State,” the official appeal’s report said.

The tribunal agreed and said the HSE is “closely akin to a department of state”.

If the High Court, and eventually the Supreme Court, confirm the ruling and apply it across all HSE properties, it will deny local authorities a lucrative rates return.

In turn the HSE would keep the money and avoid the effects of the first national rates revaluation since the 19th century. This has been piloted in south Dublin and looks set to bring higher rates bills for town-centre land in areas developed recently.

The properties assessed by the Irish Examiner are not exhaustive as some are still registered under defunct bodies like the pre-1970 Boards of Health.