The Revaluation Process 2 nd October 2018 Declan Lavelle Head of Valuation Services Areas Covered Valuation Office amp Rating System in Ireland Governing LegislationRateability National Revaluation Programme ID: 1028269
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1. Monaghan County Council - RevaluationThe Revaluation Process 2nd October 2018Declan Lavelle - Head of Valuation Services
2. Areas CoveredValuation Office & Rating System in IrelandGoverning Legislation/RateabilityNational Revaluation ProgrammeRevaluation ProcessAppeal MechanismsRevaluation OutcomesQ & A2
3. Valuation Office - Who we are & What we do3
4. Rates and Rateable ValuationThree figures relevant to Commercial Rates:Overall Rates contribution to Annual Budget: Decided by Elected Members of Local AuthorityRateable Valuation of Individual Properties (“Net Annual Value”): Determined by Valuation OfficeAnnual Rate on Valuation (ARV): Set by Elected MembersValuation x ARV = Amount of Rates liable for collection by Local Authority 4
5. Fundamental PrinciplesValuation system based on Net Annual Value (NAV)Equity & Fairness through Correctness and UniformityProduction of a Valuation List which reflects estimated value of each property, on a specified date, relative to the estimated value of every other property on that list5
6. What Properties are Rateable?A question of lawAll properties are rateable unless specifically exemptedSection 15, Schedule 3 & Schedule 4 of Valuation Acts 2001-2015Extensive case law from Valuation Tribunal & Higher Courts on what properties are and are not rateable6
7. Revaluation: Legal ContextPart 5 of Valuation Acts 2001 to 2015: http://www.valoff.ie/en/Legislation/ “Net Annual Value” specifically defined in legislationRental Value, not Capital Value“Correctness” and “Equity & Uniformity”Decisions of independent Valuation Tribunal & Higher Courts7
8. What is a Revaluation?Revaluation is a Reassessment of the rateable value of all properties in a Local Authority area at the same time, leading to Redistribution of commercial rates burden between ratepayersRevenue Neutral for Local AuthoritiesRecurring exercise (every 5 to 10 years) to maintain the fairness of rating systemResults in the production of a New Valuation List that contains modern valuations for all rateable properties in the County8
9. Revaluation - Why?Restore relativity between different properties, categories & locations:“Correctness” and “Equity & Uniformity”Reflect differential movements in rental values across sectors/locations occur over timeTransparency:Only way to bring Rateable Values back into line with contemporary property rental valuesCurrent market rental values replace old RVs which had Nominal Valuations with no relevance to modern values9
10. Revenue Neutral for CouncilRevaluation is about Redistribution of rates liabilityRates liability of individual ratepayers may changeRevenue neutral for Local Authority: Overall “Size of cake” remains the sameMinisterial Rates Cap (Sec. 56 Valuation Act 2001)Any increase in overall Rates take limited to: InflationNew developmentsImprovements to existing buildings10
11. Before & After: Examples Example AExample BExample COld RV€111.00€111.00€111.00Monaghan ARV 2018€57.63€57.63€57.63Rates Liability before Revaluation€6,397€6,397€6,397Net Annual Value (NAV) after Revaluation€25,590€20,000€30,000Assumed ARV after Revaluation***0.250.250.25Rates Liability after Revaluation€6,397€5,000€7,500Change in Liability due to RevaluationNo Change-€1,397+€1,10311
12. National Revaluation ProgrammePhase 1 Completed 4 Dublin Local Authorities & Waterford & Limerick Reval 2017 – 9 new Counties completed in September 2017Reval 2019 – Additional 7 Counties underwayLaois Revaluation – commenced in December 2017Reval 2021 – Final 6 counties (8 LAs)Revaluation is repeated every 5 – 10 years(2nd Revaluation of South Dublin already completed & of Fingal underway)12
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15. Key StepsCommissioner makes Valuation Order fixing:Valuation Date/Publication Date/Effective DateCommissioner & Rating Authority publicise OrderVO issues REVAL 2019 material to RatepayersVO collects & analyses dataRent/Lease/Tenure details/Trading data Physical property details/surveyData transferred from Rating Authority to VOVO issues Proposed Valuation CertificatesRating Authority makes Indicative ARV available15
16. Key Steps (continued)“Representations” made to Valuation Manager (40 days)VO considers RepresentationsVO issues final Valuation CertificatesCommissioner publishes new Valuation List for Rating AuthorityAppeals can be made to Valuation Tribunal (within 28 days)Rating Authority sets ARV for 2020New Valuation List becomes effective
17. Evidence BasedOccupiers – Valuation FormsRental Market Evidence – September 2017Trading Data/Accounts. Development/Construction costsRevenue Commissioners - “Particulars Delivered” transactionsContemporary Rental Market Evidence Lease details from the PSRAContemporary Rental Market Evidence 17
18. Extracts from the accounts and trading information:Year EndSpecify accounting year end (from accounts)Year End (Date)Year End (Date)Year End (Date)Total TurnoverFrom all activities€€€Breakdown of Turnover [excluding admission charges]On Sales€€€Off Sales€€€Food €€€Other (please specify)€€€Gross ProfitFrom accounts€€€Franchise Income(see note below)Details€€€Admission ChargesDetails€€€ExpensesWages & Salaries€€€Insurance€€€Entertainment Expenses€€€Licence Fees€€€Security Costs€€€Legal Fees€€€Rent Paid€€€
19. How Revaluation is Conducted Estimating the NAV - Primary Evidence
20. 20Proposed Valuation Certificate Shop
21. Is My Valuation Fair? Compare the Valuation (NAV) toRent you are payingRent you know others are payingPSRA WebsiteActual Income Streams v VO Income StreamsRent you would receive/accept if vacant and to let.Go online – Compare your Valuation to other valuations on the Valuation List.21
22. Rates Increased – Why?Possible Increase in Relative Value Property may have been altered since last valuedOutstanding request for information from VO22
23. Appeal Mechanisms“Representations” to Valuation Office by Ratepayer40 days from Proposed Valuation certificateInformal process with no feeHappens before valuation is finalisedValuation Tribunal28 daysStatutory FeeFormal and quasi-judicial processThree outcomes:No changeValuation decreasedValuation increasedAppeal to Higher Courts on Point of Law 23
24. Revaluation Outcomes – Phase 1SDCCFingalDLRDublin City CouncilWaterfordCity & CountyLimerick City & CountyReduced Rates Liability49%65%54%56%65%65%Increased Rates Liability39%30%46%41%32%32%No Change/New Property12%5%-3%3%3%24
25. Revaluation Outcomes – Reval 2017CarlowKilkennyKildareLeitrimLongfordReduced Rates Liability54.9%56.5%52.2%70%65.4%Increased Rates Liability42.3%41%42.2%24.3%30.7%No Change/New Property2.8%2.6%5.6%5.7%3.9%25
26. Revaluation Outcomes – Reval 2017OffalyRoscommonSligoWestmeathSDCC – 2nd RevalReduced Rates Liability58%62.8%68.8%55.8%60.9%Increased Rates Liability38%33.2%26.9%38.5%35.3%No Change/New Property4%4%4.4%5.6%3.7%26
27. Ratepayer SupportHardcopy material to RatepayersMaking of the Valuation OrderIssue of Proposed Valuation CertificatesIssue of Final Valuation CertificatesBriefing of Elected Representatives & copies of Specimen Documents“Walk-in” ClinicsExtensive engagement with Trade BodiesValuation Office website www.valoff.ie, E-mail reval2019@valoff.ie,Telephone Helpline Lo-Call 1890 531 431 or 01 8171033 27
28. REVAL 2019 – Key Dates6th October 2017Valuation Order made by the CommissionerRevaluation Information Forms issued to all ratepayersMid 2018 – Trading data Notices issuedMarch 2019 Proposed Valuation Certificates will issueWalk In Clinics17th September 2019Valuation List publishedWalk In ClinicsJanuary 2020 – Effective for rates purposes28
29. SummaryRevenue neutral exercise for Local AuthorityBased on Local Evidence – Local rents and Local trading data onlyRatepayer provides information requested by VODissatisfied? – Make a representation - onlineVO’s Objective - Publish a Valuation List that is Fair & Equitable to every Ratepayer and to Local AuthorityWell established statutory processAppeal to independent Valuation Tribunal29
30. Questions/Thank You30