Commercial Rates in 2024

Commercial Rates in 2024

New rules regarding commercial rates came into force on 1 January 2024, implemented through amendments contained in the Historical and Archaeological Heritage and Miscellaneous Provisions Act, 2023.

The legislative amendments amend the Local Government Rates and Other Matters Act, 2019 in the following manner:-

• Failure to pay rates before completion of a sale or transfer of property is now a criminal offence. It is no longer possible to undertake to discharge commercial rates from the sales proceeds.
• Rates were previously invoiced on the half year, which have now been replaced by an annual charge liable on 1^st January in each year. Therefore a liable person must pay the single moiety and seek an apportionment from Purchaser on a sale.

• Obligations requiring a Section 32 Notice continue which require notification to the relevant local authority within 10 working days of completion of a transaction. Failure to notify a local authority of a change to a liable person is now deemed a criminal offence, which is a new change.

• Care needs to be taken to comply with the obligation to pay the outstanding rates as this must be done prior to completion of the sale and sale is widely drafted to include voluntary transfers also.
• The failure by an owner/liable person to pay rates will trigger a statutory charge on the property which continues to apply without a time limit until the rates are paid in full. This previously had a 12 year limitation period.
• Any charge for unpaid rates falls away on the sale of the property so that there are no consequences for a purchaser if the vendor defaults on its obligation to pay rates before completion. Unpaid rates remain a personal liability of the vendor.

• Interest will apply to outstanding rates as and from 1 January 2025 at a daily rate of 0.0219% (8% per annum) and payable from 1^st January 2026.

Many of the above amendments are to be welcomed, however, the new rules will require consideration in property transactions, particularly those where there are significant liabilities to be discharged at completion.

In addition, in the Dublin City Council functional area as no rebate for vacancy now applies, landlords need to consider carefully the cost implications in taking back possession from tenants in circumstances where the property will remain vacant pending reletting and as such liable to significant commercial rates.

For further information on this, please do not hesitate to contact Roisin Bennett at Reddy Charlton LLP. rbennett@reddycharlton.ie