Hanson defends new capital value rating system
Hanson defends new capital value rating system
Finance Minister, David Hanson MP, today defended the new capital value rating system and reaffirmed his decision not to introduce a maximum limit, explaining that a cap would have to be paid for by other ratepayers.
Mr Hanson said:
“
In making the decision not to introduce a maximum limit, I was conscious that if a cap were imposed I would be asking other ratepayers to shoulder a larger share of the rates burden.
“I strongly believe that it would be inequitable to have a situation where those in lower value properties subsidise those in higher value properties, who by and large have a greater ability to pay. Indeed during the extensive period of consultation, the views expressed did not favour the introduction of an upper limit.
“While 55% of people in Northern Ireland would actually have paid less if the new system had been introduced this year, I am aware that some people will now be asked to pay more than they have in previous years. To ensure that people can adequately budget for this increase, there is transitional relief available to households where rates bills rise by more than 33% as a result of the changes. Under this scheme the householder will receive bills which rise gradually over a period of three years until reaching the new capital value rate tariff in 2010.”
Turning to the issue of those on low income, Mr Hanson said:
“
At present almost 175,000 low income households receive support with paying their rates. The new rate relief scheme aims to assist those just outside the housing benefit thresholds. Around 40,000 households could receive assistance, with on average £270 awarded. I am conscious that many older people may be reluctant to claim this relief for a number of reasons, but I would encourage anyone on low income to apply for this entitlement.
“The changes to the rating system have been introduced to make it fairer and more transparent. This reform process was started by the Executive and I am confident that in progressing the work it has been well informed by extensive periods of public consultation.
“While there has been comment from local politicians on this issue in the media, to date half of Northern Ireland MPs and nearly 90% of local MLAs have not expressed any concerns about the changes to me directly. Of course, if local politicians want to take these decisions for themselves then they can meet the 24 November deadline to restore devolution,”
Notes to Editors:
·If a cap were to be set at a capital value level equivalent to the highest Council Tax Bills in England (those in Band H), it would benefit less than 3,000 properties here – less than ½% of the entire Northern Ireland housing stock. These households would have capital values of around £500,000 and over, as at 2005 (it is understood that with recent house price inflation, there are many more in this bracket but values are fixed until the next revaluation).
·The announced proposals to the new rating system were informed by extensive periods of consultation. This included two 16-week periods of consultation, one in 2002 started by the Executive and the other in 2004.
·The current consultation is on the technicalities of the draft Order, which is the final piece of legislation in introducing the new domestic rating system. This consultation is to ensure the legislation accurately reflects the proposals that have been announced.
·As is made clear in the booklet accompanying the new rates assessments, there is a wide ranging package of reliefs for householders in place.
·To date only 2.1% (14,750) of households who have received their notifications have asked the Valuation and Lands Agency to review their capital assessment.
