Cork City Council to raise commercial rates by 5pc despite pleas from business community

By Peter McCarthy, Corkman

Cork City Councillors have voted to agree a €362m budget for the city in 2026, representing an increase of almost €36m on this year. The increase will be partially funded by a 5pc increase in commercial rates, something the Cork business community had warned against.

The chief executive of Cork City Council, Valerie O’Sullivan, told the council’s annual budget meeting that inflation, an increased demand for council services, higher payroll costs and the cost of the annual compensation payment to Cork County Council as part of the 2019 boundary extension meant that the local authority needed to increase commercial rates.

“Since 2009, the city council has increased commercial rates by a cumulative 5pc - far below the cumulative inflation rate for that 16-year period. However, in order to produce a balanced budget, it will be necessary to have a rate increase,” she said.

The city council will be reintroducing a rates incentive scheme which will give a 4pc rebate for all rate payers who have an annual rates liability of up to €4,000 and a 2pc rebate for those rate accounts from €4,001 to €10,000. The council said this means that 75pc of all ratepayers will benefit from the scheme with those ratepayers to experience an increase of between €8 and €290 on their annual rates bill.

Ms O’Sullivan said the city council recognises the challenges facing commercial rate payers, especially smaller businesses who have seen cost of running their business increase in recent years. “The city council will continue to monitor the collection of rates in 2026. We intend to give every assistance to rate payers so that they can settle their liabilities promptly,” she said.

Speaking about the index-linked annual payment to Cork County Council, the chief executive said “this is not a sustainable cost for Cork City Council. The council is engaging with the department in relation to the additional indexation cost. That cost is not included in the 2026 Budget.”

Twenty-three of the city council’s 31 elected members voted to support the budget proposed by the executive, including the members of Fianna Fáil, Fine Gael, Labour and the Green Party. It was opposed by eight members, including Sinn Féin.

The city’s 2026 budget will see a €14.9m increase in homeless funding, a €8.7m increase in funding support provided by local authorities to approved housing bodies to help fund the construction or purchase of new social housing units, and a €3.8m increase in payroll to meet national pay agreements.

The city’s five Local Area Committees, the Disabled Person’s Grant fund and Croí Cónaithe, a fund that supports the building of apartments for sale to owner-occupiers, will each receive an extra €1m next year while there will also be an increase of €650,000 in the budget for footpath repairs and tree management.

The Lord Mayor of Cork, Cllr Fergal Dennehy, welcomed the adoption of the budget, which he said “reflects our shared commitment to building a better Cork. It prioritises investment in essential services that matter most to people’s daily lives and will enable us to maintain and improve the standards of service delivery, while also responding to emerging needs.”

“We acknowledge that it includes an increase in commercial rates, a decision not taken lightly. This adjustment is necessary to sustain the level of service our city requires and deserves. However, we are equally committed to ensuring that ratepayers are supported through this transition. The rates rebate scheme will help businesses, particularly small and medium enterprises, in managing the impact of the rate increase,” he said.

The Cork Business Association (CBA) had called for commercial rates to stay at their current rate, given the escalating costs facing businesses from factors such as pension auto-enrolment and the rise in the minimum wage.

“We are facing continuous cost increases and it’s making business unsustainable. While national policies are often out of our control, we the business community in Cork City are pleading with local councillors not to increase rates at this critical time or we will face more closures,” Sean McCarthy, owner of Paddy the Farmer’s Bar and Tequila Jack’s Restaurant, said before the budget meeting.