Changes to Commercial Rates

Significant changes to the commercial rates regime in Ireland came into effect on 1 January 2024.  The changes were implemented by amendments to the Local Government Rates and Other Matters Act 2019, (the 2019 Act).

The main issues to be aware of are:

Liable persons

The revised 2019 Act provides a new definition for "liable person" being the occupier of the relevant property on the first day of the local financial year (ie 1 January unless amended) or, if the relevant property is unoccupied on that day, the person who is for the time being entitled to occupy the property that day.

Where a rate has been levied on a relevant property, and the liable person has not paid the rates in full for the calendar year, they shall only be liable for the portion of the year for which they were the liable person, and the remaining portion of the rate for the year shall be levied on any subsequent liable person on a pro-rata basis. It is not yet clear how this will be implemented by Local Authorities in practice.

Obligation on liable persons

Local Authorities are obliged to establish and maintain a database of relevant properties (the Database). The Database must include (a) the name of the occupier (b) if unoccupied, the name of the person entitled to occupy (c) the address of the property (d) any unique reference number assigned to the property (e) nature of the business at the property and (f) any other information in relation to the property considered appropriate by the local authority.

If a liable person becomes aware that any particular in respect of them or the relevant property on the Database is incorrect or has ceased to be correct, they are obliged, not later than 10 working days of becoming aware, to give notice in writing of the incorrect detail to the Local Authority.

Where a person: -
-    ceases to be a liable person,
-    becomes a liable person, or
-    changes their status as a liable person, for example, the liable person moves from being an occupier to the person entitled to occupy or vice versa

That person shall, within 10 working days, give notice in writing to the Local Authority specifying the date of the change.  Where a person ceases to be a liable person, they must provide the Local Authority with the name and address of the new liable person (if known). In many transactions, there will now be a dual notification requirement for a vendor and a purchaser or a landlord and a tenant.

Sale of a relevant property

Before the completion of the sale of a relevant property, the liable person shall pay to the Local Authority any rates and accrued interest due and payable in respect of that property for the period up to and including the day immediately before completion.

Local Authorities must provide, within 10 working days of application by or on behalf of a liable person, confirmation of the amount of any unpaid rates and accrued interest at the expected date of completion of the sale or confirmation that there are no outstanding amounts payable by that liable person. It is therefore important to request confirmation of these amounts well in advance of completion to avoid delays at closing.

Charge on the property

Any unpaid rates and interest due by the owner of a relevant property shall be and remain a charge on the relevant property without time limit until such time as it is paid in full. However, the charge will cease to attach to the relevant property if the liable person ceases to be the owner of the property. The liable person will continue to be liable for the unpaid rates and accrued interest.

Form of notice

There is currently no prescribed form of notice required by the 2019 Act and regulations will be required to provide for this.  In the meantime, some Local Authorities have produced their own form. However, these appear to seek information not required under any statute and so the Law Society of Ireland have recommended that they not be used.

Penalties

A liable person who, without reasonable excuse, fails to give notice of incorrect details on the Database or fails to give notice of a change of status shall be guilty of an offence and liable to a fine of up to €5,000.  A liable person who fails to pay rates and accrued interest prior to completion of a sale of relevant property shall be guilty of an offence and liable to a fine of up to €5,000 and/or imprisonment for up to six months.

For more information, please contact Aisling Farrell or your usual contact in Beauchamps.