Frequently asked questions - Regional Rate
The regional rate is a property tax levied separately on households and businesses in Northern Ireland. It is set centrally by the Department of Finance and Personnel.
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Public expenditure in Northern Ireland is funded by a block grant from Westminster and the regional rates. The regional rate makes a contribution towards services provided by the devolved Government Department such as education, health and personal social services, housing, and roads (for further information on the budget see www.pfgbudgetni.gov.uk. It is usually not earmarked for any particular expenditure.
District Rates are struck independently of the Regional Rate; each of the 26 individual councils strike their own District Rate. Just over two thirds of the Councils’ income is met through this source, which includes both domestic and non-domestic elements (as with the Regional Rate). The District Rate pays for services provided by District Councils, including refuse/waste management, leisure centres and parks, and economic development. For further information on local government, see relevant weblinks below to DOE website and RCA website
The rates are based on the rental value of properties occupied by households and business. From 1 April 2007 domestic rates will be based on household capital values but businesses rates will continue to be levied on rental values.
The calculation of the domestic and non-domestic regional rates is outlined in the regional rate key facts and figures.
The rate increases reflect the budget decisions made in the Priorities and Budget 2005-08 and contribute towards services provided by the Government Departments.
Domestic Rate Aid Grant (DRAG) is an amount by which the Domestic Regional rate in the pound is reduced for ratepayers in private dwellings. It had its origin in compensating the domestic ratepayer for the tax relief which non-domestic ratepayers could claim on their rates and dates in Northern Ireland from at least 1972.
Under the existing legislation the Regional Rate is a uniform rate for both domestic and non-domestic properties, the only distinguishing features being different valuation dates for domestic and non-domestic net annual values and DRAG itself. This means that if different rate increases are required for domestic and non-domestic regional rates, then DRAG is the only mechanism available to make the adjustment. In essence, DRAG is the mechanism for determining the balance between the Regional Non-Domestic and Regional Domestic Rate poundages because the non-domestic and domestic rates cannot be set independently of each other.
