New rates plans necessary, says Minister

A new domestic rating system, due to come into effect from April 2007, means households in Northern Ireland will pay rates on a fairer basis, Finance Minister Ian Pearson has said today.

Launching the government’s policy paper on the reform of the domestic rating system, the Minister said reform was "a necessity" and that this had been confirmed by the outcomes of the public consultation exercise launched by the Executive in 2002.

"The domestic sector was last re-valued nearly 30 years ago and is riddled with anomalies and inequities," the Minister said.

"Rental values no longer mean anything to householders, the majority of whom are now fortunate enough to own their home.

“Under the new arrangements, domestic rate bills in Northern Ireland will be calculated on the basis of each property’s assessed capital value rather than a banded system. This builds on the decision announced in 2002, in light of the outcomes of the consultation exercise, to change the basis of valuation from rental to capital values.”

The Minister also announced that regular revaluations will be carried out to ensure that the new system is up-to-date and reflects changes in the property market. In addition, a new appeal process will be established for householders unhappy with their property valuation.

Commenting on the redistributive impact of the proposals, Mr Pearson said: “It is likely that there will be some significant shifts in rate bills, particularly at the top end of the market.

"It is only fair that those who can afford to pay do pay a fairer share as soon as possible, but there is also a need to manage the transition effectively. I have therefore decided that transitional arrangements will be introduced to assist those who may experience significant increases in their rate bill.

"These arrangements will be finalised when the revaluation exercise is completed and published well in advance of April 2007 when the first rate bills under the new system will be issued.”

The Minister also expressed the government’s desire that future decisions on rating reform would be taken forward by a restored Executive and Assembly. This will be taken into account in the legislation required to implement the government’s reforms, he explained.

“At a policy level, I am also proposing that we build a number of legislative levers into this reform package to ensure that local Ministers, when they return, will be able to take fundamental decisions about the new system I am announcing today.

“This will include the ability to define the scope and remit of the relief scheme and decide whether to introduce a deferment scheme for pensioners," he added.

(MB)