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REVALUATION of commercial rates in Limerick city could see some retailers paying more, depending on the location of their business and its rentable value.
Despite a dramatic fall in rents, this will not necessarily translate into a reduction in rates, as some property owners will have to make up the deficit, from those whose rates are lowered or who cannot pay.
The Limerick Post has learned that under the national programme to revalue all commercial property, work began on valuing Limerick properties in March of this year.
However, a local ratepayer highlighted that people in upward-only lease reviews, who cannot renegotiate their rates’ could be penalised further.
“There will also be no incentive to maintain or do up properties as this will be reflected in an increase in rent”, said the ratepayer.
The new system will see the rentable value of the property multiplied by the annual rate on valuation (ARV), as set by the local authority, based on the revenue it needs to raise for the year.
Conceding that there will be winners and losers in the process, Patrick Conroy of the Valuation Office, speaking to the Limerick Post ahead of a presentation given at the National Franchise Centre this Wednesday said:
“The aim is to redistribute the burden to achieve more equity and fairness by capturing the market at the most appropriate valuation date.
“The rental of a property is already based on the success and footfall in the area in which it’s located, and now rates will be on the same basis. If one street falls off in value the rates will fall, whereas there will be an increase on busy streets.
“We don’t just make it up – all the details we collect from businesses will go to our market analysis unit”.
He stressed that the local authority will gain no increase in revenue.
“What they are entitled to collect has been capped and will remain the same”.
Meanwhile, Siobhan Murphy of GVA Donal O’Buachalla property consultants who deal in valuations said that some ratepayers could face an increase of up to 100%.
“People might be expecting a reduction in rates but in reality they could be making up for a decrease granted for others,” she told the Limerick Post.
Explaining that with the council having to collect a fixed amount, there could be a ‘buffer’ of up to 20% involved to allow for non-collection, Ms Murphy added:
“It’s early to tell what the effects will be as only three out of 88 areas have had the new multipliers applied to date, despite the revaluation being ordered in 2005”.
In the completed areas of Fingal, Dun Laoghaire and South Dublin the local authority multiplier ranged from 0.15 to 0.17, based on a 2005 valuation. It is expected this will be higher in Limerick due to a more dramatic decrease in rents .
“Ratepayers will have just 28 days to submit representations. if unhappy with the new valuation certificate,” said Ms Murphy.
An amendment bill is currently in place to hurry up the process and, should this be passed, will mean the removal of the right to internal appeal.
A right to appeal to the Valuation Tribunal will remain and final valuation certificates will be issued in early December 2014 with the new valuation list coming into effect from January 1, 2015.
