DÁIL QUESTION addressed to the Minister for Public Expenditure and Reform (Deputy Brendan Howlin)

by Deputy Anthony Lawlor

for WRITTEN ANSWER on 03/12/2014

To ask the Minister for Public Expenditure and Reform if the exemption of commercial rates recently granted under the Valuation Bill 2014 to community/not for profit early childcare facilities will be extended to all early childhood education facilities providing the early childhood care and education scheme; and if he will make a statement on the matter.


The Valuation Act, 2001 provides that all buildings used or developed for any purpose, including constructions affixed thereto, are rateable unless expressly exempted under Schedule 4 of the Act. Such exempt buildings would principally include those used for public worship, education and health care provided on a not-for-profit basis, and charitable purposes. In general, the Act maintains the long-standing position that all commercial properties – including all private childcare facilities such as play schools, pre-schools, crèches and Montessori schools – are liable for rates.

At present, certain childcare and pre-school facilities can be exempt from rates under the terms of paragraph 16 of Schedule 4 of the Valuation Act, 2001, where the organisation is a charitable organisation, that uses its property exclusively for charitable purposes and otherwise than for private profit. The organisation claiming charitable status for the purpose of qualifying for exemption from rates must comply with the definition of “charitable organisation” as stated in PART 1 section 3 of the Valuation Act, 2001. Similarly, certain pre-school facilities can be exempt from rates where  the conditions detailed in paragraph 10 of Schedule 4 are met.

Inconsistency in the approach to the exemption from rates of childcare and early education facilities was raised at Committee Stage of the Valuation (Amendment)(No.2) Bill 2012 in the Seanad with Minister of State Simon Harris, who was taking the Bill through the Seanad on my behalf. The  Government’s response was to  approve  a Seanad Report Stage amendment to the Bill, to insert into Schedule 4 of the Valuation Act 2001 an exemption from rates for properties occupied by parties that provide early childhood care and education on a not-for-profit basis. This amendment was proposed and passed at Report Stage in the Seanad on 20th November 2014. I intend that the Bill will be considered by the Dáil shortly.

Making exception to core, long-standing valuation principles can have a far reaching negative impact on the rates system and consequently a far reaching impact on Local Government funding. The decision taken by Government to extend the exemption from rates for early childcare and education was taken having considered the views of stakeholders in the sector. As outlined in the Seanad, key valuation principles have to be respected to retain the integrity and equity of a system that is a significant source of funding for Local Authorities. One of those principles is that properties of occupiers that operate with the intention of making a profit are rateable.   Therefore, I do not intend to extend this exemption to all early childhood education facilities providing early childhood care and education.