Parliamentary Question for the Minister for Environment, Community and Local Government (Phil Hogan TD)
For WRITTEN ANSWER on 25/02/2014
To ask the Minister for Environment, Community and Local Government regarding the Local Government Reform Act 2014, when section 32 will become operative and the benefit of this innovative provision accrue to persons opening new businesses in premises where commercial rates have been left unpaid by previous occupants; and if he will make a statement on the matter.
Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The levying and collection of rates are matters for each individual local authority.
Under rates legislation the person liable for payment of rates is the person in occupation of a rateable property on the date of the making of the rate by the relevant local authority. The owner, rather than the occupier, may be liable for commercial rates if the property in question is unoccupied on the date of the making of the rate. Currently, where a person’s occupancy commences after the date of the making of the rate, that person, as a subsequent occupier, could be held liable for up to two years arrears of rates if they cannot be recovered from the person with whom the primary liability lies. However, Schedule 2 Part 6 of the Local Government Reform Act 2014 provides for a change to rating law which will remove this subsequent occupier liability.
It is not the intention in removing subsequent occupier liability to undermine local authorities’ collection powers and put at risk the collection of rates income. Therefore, section 32 of the Local Government Reform Act 2014 provides for all unpaid and outstanding rates liabilities to be discharged prior to the transfer of ownership or other interest in a property (including tenancy) and that this transfer of interest must be notified to the local authority within two weeks of its effect. This measure is intended to strengthen local authority collection powers in this area without causing any additional burden for subsequent occupiers. Furthermore, the amendment provides that any rates due by an owner of relevant property and not discharged shall remain a charge on the property.
Under these new provisions, should the owner fail to notify the local authority of a change of occupancy, the Act provides that the owner or landlord will become liable for an amount which is equivalent to two years of outstanding liabilities that may have accrued in respect of any previous occupier of the property. Any amount of that charge that remains unpaid by an owner will become a charge on the property for up to 12 years. The imposition of such a charge on the landlord or owner does not transfer any liability that may rest with any previous occupier.
The Local Government Reform Act 2014 was signed by the President on 27 January 2014. The timing of the commencement of the provisions outlined above is being considered in the context of the timetable for commencement of the Act generally. My Department will be consulting with local authorities in that regard, in order to ensure that appropriate procedures are in place, and likewise that ratepayers and property owners are properly notified of the new obligations.