Rates appeal by private care homes
Operators mount landmark challenge over commercial rates charged to elderly residents
A landmark case could see residents in private nursing homes receive a significant windfall as part of an appeal over the charging of commercial rates on care facilities and buildings.
Private nursing home operators are appealing to the Valuations Office. They say their facilities are residential units and commercial rates currently charged on them should not apply.
Industry representatives estimate up to €100m in repayments dating back over the past five years would be made available if the legal action is successful.
This would see money returned to private residents and the Fair Deal system.
The case is set to start in November, and, if successful, will increase pressure on local authorities and the Government to reimburse elderly residents and their families who have been made responsible for paying sizeable portions of the rates applied to their nursing homes.
HSE homes are exempt from commercial rates. Disability and other healthcare services are also exempt from paying commercial rates.
Nursing Homes Ireland (NHI) CEO Tadhg Daly called for equality in the valuations system, saying residents should not be expected to pay commercial rates for the place they live in.
"NHI can confirm that member nursing homes are appealing to the Valuation Tribunal this coming November," he told the Sunday Independent.
"The imposition of commercial rates upon residents in private nursing homes is discriminatory and requires redress. The nursing home is the residents' home."
The Valuations Office, a central body established to give valuations of commercial and industrial properties to ratepayers and rating authorities, declined to comment on the appeal. However, a spokesman said commercial rates are paid to local authorities based on how a property is used.
"One of the key principles underpinning the rateable valuation system is that properties of occupiers operated with the intention of making a profit are rateable," he said.
Rates are calculated by assessing the rent a property may receive for one year and the expenses a tenant may be liable for.
Irish Patients' Association chairman Stephen McMahon said many families would not realise tenants were being made liable for commercial rates charged on nursing homes. "If they were in their family home they would not pay rates. If they were in a home operated by HSE or charity they would not pay rates," he said.
"For fairness and equity is to be restored, either commercial rates are not charged to voiceless nursing home residents or all households pay rates. If they are exempted then the cost of refunds to residents or their estates for previous years could amount to €100m."
A spokesman for the Valuation Office said there were a number of avenues for redress when the occupier of a rateable property was dissatisfied with rates paid. If an appeal to the Valuation Tribunal is unsuccessful there were avenues for appeals to be made through the courts.
Many residents cover the cost of commercial rates in their monthly nursing home bills. If the appeal rules in favour of the nursing homes, private residents paying for their care could be in line to be reimbursed these charges. In the case of Fair Deal recipients, the money would have to be returned to the HSE.
Mr Daly said it was unfair that private homes faced these charges: "HSE nursing homes, those in receipt of fees that are a national average 60pc above those payable to private and voluntary counterparts, are exempt from commercial rates. Furthermore, disability and other healthcare services are exempt. Equality must be applied for all residents in nursing home care."