What is Revaluation?
A “Revaluation” is the production of an up-to-date Valuation List of non-domestic property, for Commercial Rates purposes, within a local authority area, by reference to property rental values at a specified valuation date. The process results in the publication of a Valuation List containing the new valuations of all relevant properties thereon and that List becomes effective for Rates purposes subsequently. The Relevant Date (Valuation Date) for assessing rental values in County Westmeath and the other Local Authority areas listed above is the 30th October 2015.
What will happen?
The Valuation Office will write to all rate payers to ask them to submit a Revaluation Information Form within 28 days of notification. This form is a request for detailed information on any eligible property and will include queries on the lease, landlord, size, car spaces and fit-out of the property. Rate payers are legally obliged to complete and submit the Revaluation Information Form to the Valuation Office.
On receipt of the Revaluation Information Form, the Valuation Office will analyse the returned rental information and other available information and set a valuation on the property in line with rental values in that Local Authority area at the Valuation Date of the 30th October 2015. Once the Revaluation is completed the Valuation Office will send occupiers a Proposed Valuation Certificate which will show the details of the valuation proposed for that particular property.
Occupiers will have an opportunity to make representations within 40 days of the date of issue of the Proposed Valuation Certificate if they are unhappy with the valuation or anything contained in the proposed certificate. After considering representations the Valuation Office will issue a final Valuation Certificate and this will be the basis for the commercial rates that will be levied on the property by the Local Authority from 2018 onwards.
If occupiers are dissatisfied with the final Valuation Certificate they have the right to appeal the valuation to the Valuation Tribunal, an independent body set up to settle disputed valuations between Valuation Office and rate payers or local authorities.
Why is Revaluation necessary?
The purpose of the Revaluation is to bring more equity and fairness in to the local authority rating system. The last general revaluation took place in 1988. Current Rateable Values (RV) bare little resemblance to market rents currently in existence in any local authority area that is yet to be revalued. Following Revaluation there will be a much closer relationship between the rental value or valuation of a property and its commercial rates liability.
The overall rates income for the local authority after Revaluation will remain unchanged so the revaluation process is in essence a more equitable distribution of the rates liability which is far more closely aligned to current market rents. Any increase in rates will be capped and limited to the rate of inflation in the year following Revaluation.
What does Revaluation mean for commercial rate payers?
Revaluation means that your rates liability will be assessed differently, in line with market rents as at 30th October 2015 and it could increase, remain unchanged or decrease. In the most recent Revaluations undertaken in Limerick City & County and Waterford City & County an Annual Rate of Valuation (ARV) in the region of 0.25 was adopted.
For example, take three properties A, B and C, each with a current rates liability of €4,000 but with differing valuations of say, €13,000, €16,000 and €18,000 respectively. Assuming, the local authority sets an ARV of 0.25 similar to that set in Limerick and Waterford after the Revaluation, the table below shows the potential change in the rates liability of each property following Revaluation.
Property A Property B Property C
Rates Liability before Revaluation €4,000 €4,000 €4,000
Valuation following Revaluation €13,000 €16,000 €18,000
Assumed ARV set by local authority
after Revaluation 0.25 0.25 0.25
Rates Liability after Revaluation €3,250 €4,000 €4,500
Change in Rates Liability due
to Revaluation – €750 No Change + €500
The Valuation (Amendment) Act 2015 – Implications for rate payers
Following the introduction of the Valuation (Amendment) Act 2015 a number of changes were made to the revaluation process, these changes were designed to significantly speed up the revaluation process which commenced almost 15 years ago following the implementation of the Valuation Act 2001 with the first revaluation taking place in 2005 in Dun Laoghaire/ Rathdown. The aim was to have revaluations every 5 to 10 years. Since then only the four local authority areas in Dublin, Waterford City & County and Limerick City & County have been revalued. Some of the changes include the use of occupier assisted valuation (self-assessment), outsourcing to rating specialist firms and general market data (including the use of statistics and computer modelling as valuation aids).
In addition the 2015 Act removes the first appeal to the Commissioner of Valuation meaning that occupiers will no longer have a three phase appeal process and will now only be entitled to make representations and subsequently, if still unhappy, an appeal to the Valuation Tribunal whose decision is final. The 2015 Act introduced several changes aimed at streamlining the Valuation Tribunal to deal with the likely increase in appeals as a consequence of the First appeal stage being removed.
The Act also provides for the partial exemption for sports clubs whereby non-profit making sports clubs are no longer liable for commercial rates. However, sports clubs with profit making elements, for example a bar in a clubhouse, will be assessed for rates on the profit making element only.
Winners & Losers
There will be winners and losers in the Revaluation of commercial property in County Westmeath and the other local authority areas to be revalued as commercial rates will be far more closely linked to current rental values. To date the main beneficiaries of Revaluation have been hotels, warehousing, licenced premises and secondary/ tertiary retail units. It would appear that prime retail properties and offices may face an increase in rates liability due to the relatively higher rental values of these properties.
Get advice and don’t delay
It is critically important to note that ‘time is of the essence’ when dealing with rating matters. If an occupier fails to meet the deadlines set out in the correspondence from the Valuation Office they risk their representations or any subsequent appeal being thrown out. If you are happy with your proposed valuation you do not need to do anything following the issuing of the proposed valuation certificate. If on the other hand, you need to appeal the proposed valuation and you are unsure what to do you should seek advice from a reputable firm of Chartered Surveyors with experience in the Revaluation process.
Andrew Carberry MSCSI MRICS is a Chartered Surveyor and RICS Registered Valuer with Power & Associates Commercial Property Consultants and Chartered Valuation Surveyors. Power & Associates Commercial Property Consultants and Chartered Valuation Surveyors are one of the leading independent provincial commercial real estate practices with offices in Athlone, Galway & Limerick. Power & Associates provides expert valuation advice on all matters including commercial rating in the Midlands, West and Southern regions of Ireland.
Power & Associates, 17A Mardyke Street, Athlone, Co. Westmeath.
Contact Andrew Carberry, Director on 090 648 9000