Councillors extremely frustrated at ‘regressive’ rates system

County Buildings on Prospect Hill.

County Buildings on Prospect Hill.

A debate on commercial rates at this week’s meeting of Galway County Council led one exasperated councillor to remark that there would not be a rural pub left in Galway in a few years time if the system was not changed. The method of collecting rates was labelled as ‘outdated and antiquated’ where the amounts paid were in no way related to business income.

The debate followed a presentation by a member of staff from The Valuation Office, Ireland’s property valuation organisation. A revaluation of commercial properties is currently taking place in County Galway. Rates are calculated by multiplying the Annual Rate on Valuation [as determined by the county council], by the valuation on the property, as determined by The Valuation Office. Therefore if the value of your property rises, this heightens the rates bill.

The presentation by Damien Curran led to a number of councillors lamenting how this system continues to heap unfair pressure on local businesses. They claimed business owners all across the county were living in fear that a member of staff from The Valuation Office would pay them a visit and revalue their property at a higher price.

Pubs in dire straits

Loughrea councillor Moegie Maher spoke directly to a beleaguered Mr Curran. “Hundreds of businesses in Galway are struggling. I am not sure if you are aware of the amount of them that are closing down because they cannot pay rates. They are afraid of their life that they’ll be subjected to this re-evaluation process. It is ok to be using a calculation system like this in Dublin where pubs and other businesses are flying but it is a very different situation here.”

The Fine Gael representative told an anecdote about a pub owner whose premises was revalued and the rates bill quadrupled. “He is now getting ready to close the door. Twenty or 30 years ago the footfall was there in pubs, I cannot for the life of me understand when revenue is down so much that it would be valued higher.’’

Mr Curran explained that the pub building would be valued at the market rate of comparable properties in the area. He said that while he could not comment on individual cases, it was possible the original valuation was very old and outdated. Councillor Maher said he would supply him with the detail of the case in due course.

Independent councillor Shaun Cunniffe seconded the sentiment of Councillor Maher that a ‘Dublin-centric’ approach could not work elsewhere. He said the whole system for rates calculation should be abolished and there was a need for a fair and equitable system to be put in place.

Fianna Fáil representative Gerry Finnerty, a publican himself, said rates were a very difficult topic for many business people who were trying to set aside the money to pay them. “I have to put my hand up and admit myself that I am behind. It is a serious issue within the county. There are people who are four or five years behind on payments, the game is nearly up for them. There needs to be a whole re-think on the situation.”

Calls for drastic changes

Another publican, Independent representative Timmy Broderick, said rates should be based on profitability. “People who are not making a profit have to be exempt. I know three licensed premises where nobody can be got to rent them, the owners cannot give them away. Why are they having to pay rates? How do you establish a rate on these properties that owners cannot get any rent for? We need a drastic revision in the way rates are calculated. The current system is not tenable. Go back and tell the Minister that.”

An exercised councillor Michael Fahy said if there was not an exemption given by The Valuation Office, every rural pub in Galway would eventually close. “You will see the heart of every village in the county gone because the profit simply is not there. Dramatic action has to be taken. Something has to be done for the ratepayers who cannot afford them. That is the message that needs to be conveyed.”

Fellow Independent councillor Michael Connolly commented that the rates base was constantly getting smaller and smaller on the basis that the system is so regressive and more businesses are closing.

Fianna Fáil’s Donagh Killilea asked if it was possible that towns would become pilot areas, where no rates would be paid for a period of time to encourage businesses to set up in those areas. “Places like Ballinasloe, Tuam, and Gort - towns all around the county are suffering because the rates being paid, in lots of cases, are higher than the rent. From the council’s point of view, it is important we are encouraging businesses to open up and revitalise these town-centres. It is also so important that rural pubs are kept open. They are the centrepoint of villages.”

Damien Curran replied that setting rates was not within The Valuation Office’s remit, its only role iwas to value properties. “The issue of collection and payment of rates is up to the local authority.”

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