EXECUTIVE REVIEW OF RATING REFORM - RECENT DEVELOPMENTS

Consultation has been announced on the future levels of rating allowances paid under voluntary Article 21 landlord agreements.These levels are being reviewed as a result of the recent decision on the rating of empty homes (see below).The consultation paper sets out the background on landlord liability, recent developments in rating policy, the need for a reduction in the landlord allowance and the proposals for change.  The document also highlights the likely financial impact of the proposed changes and provides a summary of an initial integrated impact assessment.  The consultation paper and full initial Integrated Impact Assessment are available on this website and hard copies can also be made available on request.  

Responses may also be sent to: ratingpolicy.cfg@dfpni.gov.uk or faxed to 028 91858008

The Executive first announced its decision to introduce the rating of empty homes in 2007. Following this, consultation on the detailed policy measure was undertaken between May and August 2008 and the way forward subsequently set out in a consultation report in 2009.

Originally timetabled for introduction in April 2010, the Minister took the decision in September 2009 that the rating of empty homes at 100% would not be introduced in April 2010, being postponed until 2011 with the situation to be kept under review.

Having taken account of the position of the housing market the Minister announced on 29 June 2010 that the rating of empty homes  would be introduced from 1 October 2011. This will provide those holding empty properties with time to prepare for the new charge, or get the home in question occupied. In addition for unsold houses that are already built and those that are completed in the next financial year, the will be an 18 month initial exemption.This exemption will be reduced to 12 months for subsequent years.

Certain empty homes will be excluded from rates, including where:-

On 25 May 2010 the Finance Minister Sammy Wilson announced his decision not to proceed with the revaluation of non domestic properties, planned for April 2011.

The revaluation had originally been due to take effect in April 2010. However it was postponed given instability in the local commercial property market and to allow time for the market to recover.

The decision to cancel the revaluation was informed by analysis of the commercial property market This showed that there was insufficient market evidence to establish a reliable new Valuation List of non domestic properties.

That analysis also suggested that, if the revaluation proceeded, it would fall well short of international valuation standards.

In order to avoid any further uncertainty, the next revaluation will now take place in April 2015. This decision will allow Northern Ireland to align with the next revaluation of non domestic properties in the rest of the UK, which is due to occur then.

In 2009, the Department carried out an evaluation of the policy of rating vacant commercial premises. This was a planned evaluation, given that it was five years since the policy had been put in place.

The report presented the results of this evaluation process, part of which included a targeted consultation exercise with key stakeholders in order to determine their views on the impact and effectiveness of the policy.

As a result of the reports findings the Minister decided to:-

·retain empty property rate relief at 50%;

·retain the exclusions available in respect of the policy; and

·add a further exclusion for companies in administration.

Regulations giving effect to the further exclusion were made on 18 February 2010 and came into operation on 1st April 2010. A copy of the regulations can be found on the OPSI website

The Rates (Amendment) Act (Northern Ireland) 2009 received Royal Assent on 3 November 2009 and gives effect to high level policy decisions that were agreed to by the Executive in late 2007 and which were consulted on during 2008. The Act also provides for some additional measures and amendments in relation to the non domestic sector.

A full version of the Act (to amend the Rates (Northern Ireland) Order 1977) and explanatory notes to accompany the Act can be found at the OPSI website http://www.opsi.gov.uk/legislation/northernireland/acts/ni-acts2009a

It was announced on 15 December 2008 that a small premises rate relief scheme for business would be introduced for Northern Ireland.

Subordinate legislation was prepared under the new powers created through the Rates (Amendment) Act (Northern Ireland) 2009, and this came into operation on 1 April 2010.

Fact Sheets on the main scheme(161KB) and the enhancement for Post Offices(155KB) were distributed to key stakeholders explaining the scheme in more detail.