Local authorities must wait for huge backlogs to be cleared before they can start charging correct commercial rates on many newly-built and altered premises, new figures reveal.
Property sites used for commercial operations that have been altered must first have their values revised by the Valuation Office before the relevant city or county council can begin charging new rates.
But data released through the Department of Justice shows that as of October 2016 there was a backlog of 6,370 premises that have not yet been assessed for rates payable.
This essentially means that local authorities may be taking in far less money than they are potentially owed on newly-constructed business units, or those that have been the subject of significant renovations or extensions.
The councils can do nothing to move the process along any faster, and are reliant on the centralised Valuation Office to decide property values on an individual basis so new commercial rates can be applied.
Problem
Of 6,370 outstanding rates assessments for new, altered, demolished or amalgamated business units nationwide that are yet to be carried out, nearly 3,000 date back more than a year, with 1,259 waiting over two years for an assessment.
The problem of councils having to wait years for buildings to be rates assessed is particularly acute in Cork, Kerry and Meath as these areas have not yet been included in the Valuation Office's national revaluation plan.
The agency is hoping to revalue every rateable property in the country – a process that has not been carried out since the mid-19th century – with the aim of carrying out similar revaluations across five- or 10-year cycles in future.
The process aims to iron out inconsistencies in commercial rates payments between similar types of properties that may have been registered in different years.
This also takes into account new and renovated buildings, clearing any queues of properties that had not yet been assessed in Dublin, Waterford and Limerick where wholesale revaluations have already been completed.
However, between them the two Cork councils have 411 property sites that have undergone construction, renovation, demolition or amalgamation prior to 2015 that have not been rates assessed.
Indeed, Dublin local authorities are now struggling with a new wave of unprocessed applications.
Whereas virtually every rates assessment or 'revision' application predating 2015 has been cleared in the Dublin City Council area, 367 such applications are outstanding for this year, along with 172 in Fingal, 159 in Dún Laoghaire-Rathdown and 129 in South Dublin.
Challenge
The figures were released to Sinn Féin finance spokesman Pearse Doherty following a Parliamentary Question to Minister for Justice Frances Fitzgerald.
Responding to a query from The Irish Times, a spokesman for the Valuation Office acknowledged that despite its best efforts it has "not kept pace with the demand from local authorities for revision of valuations".
Such is the scale of the challenge, the agency is setting up a dedicated revisions unit to deal solely with revision applications for newly-built and renovated commercial properties, which will cost up to €750,000 to establish.
It also plans to increase its number of valuers by more than a third to about 90 from the current level of 71, with all additional staff being assigned to the new revisions unit.
It is estimated that about five per cent of the 6,370 properties on the revisions list are awaiting valuation for the first time, meaning they are instead liable for a temporary property levy for months or even years until a proper valuation is applied.
Local authorities can decide their own commercial rates, which are a key revenue stream used to fund general operations such as public lighting, fire services and libraries.
