06 October 2003 Minister Launches Consultation On Non Domestic Vacant Property Rating And Industrial Derating Phase Out Legislation
The Parliamentary Under-Secretary of State with responsibility for Finance today launched a 12-week consultation on the draft legislation to introduce vacant property rating for non-domestic property and to gradually phase out industrial derating.
Ian Pearson MP said:
"This consultation exercise is an opportunity for interested organisations, groups and individuals to comment on the draft legislation itself. The draft legislation aims to give effect to the policy decisions to introduce vacant property rating from 1 April 2004 and to phase out industrial derating from 1 April 2005, which were announced on 16 April this year.
"There has been considerable debate about the impact of the decision to gradually phase out industrial derating. The draft legislation reflects the support for change, which was evident during the extensive public consultation exercise that led to the announcement in April. It provides for rates to be phased in over a prolonged period of time and for a low liability rate (15%) in the first year in direct response to the views and concerns voiced by the local business community. All those affected by this change will have time to adjust and plan and we will be issuing an information leaflet with further assistance and advice shortly.
"The provisions on vacant property rating in the draft legislation apply to the non-domestic sector only. The features of this new rate largely mirror those that have existed in England and Wales for some time, including a 50% rate liability, an initial three-month exemption period and the introduction of a completion notice system for new buildings. There will also be a number of limited exemptions, including industrial property which will be defined for this purpose."
Mr Pearson emphasised the contribution the new measures will make towards regeneration. He said :
"I remain convinced that these are reasonable measures that do no more than bring Northern Ireland into line with the position in England and Wales. They are key reforms that will deliver additional revenue and make investment in key strategic infrastructure projects and public services a reality. Timely implementation of these reforms is critical to the investment programme and it is for this reason that I am pressing ahead with this important consultation exercise at this time. The outcomes of this consultation exercise will inform the next stage of the legislative process which I hope will taken forward by a restored Executive and Assembly."
NOTES TO EDITORS
- On 24 October 2002, Ian Pearson MP, the Minister with responsibility for Finance, announced that it was his intention to introduce the rating of vacant property and the removal of industrial derating. This announcement followed an extensive public consultation period from May to October 2002 during which these measures received broad support. He also commissioned further work on the detail of these policy changes that led to the issue of a Policy Paper on 16 April 2003. This paper outlined the key decisions, timings and next steps, including the preparation of the necessary legislation.
- The rating of vacant non-domestic (commercial) vacant property will begin on 1 April 2004. Key features of this new rate include a 50% rate liability, an initial 3-month exemption, the exclusion of certain property such as manufacturing premises and the introduction of a completion notice system for new buildings. These arrangements mirror those already in operation in England and Wales. #
- The phasing out of industrial derating will begin in April 2005, with a low 15% liability in the first year. Full 100% liability will not take effect until 1 April 2011.
- Legislation is required to bring these changes into effect. The Proposal for a draft Rates (Amendment) (Northern Ireland) Order 2003 has now been published and will be subject to a 12-week consultation period ending on 2 January 2004. This consultation is on the wording and effect of the proposed Order.
- A review of the existing criteria for entitlement to industrial derating will be undertaken later this year and it is intended to issue a policy paper on other non-domestic relief issues such as a hardship and small business relief schemes.
- A public information programme is underway. A leaflet will issue to occupiers of industrial property to advise them of the changes coming into effect and how best to plan for them.
- 7. The consultation documentation launched today is available on the Internet at: www.nics.gov.uk/ratingpolicy/
