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2007 Executive Review of Rating Reform

DATA SHARING: CONSULTATION

One of the major issues to emerge from the research and analysis arising from the Executive’s Review of the domestic rating system was the low level of take-up of reliefs. Therefore the Executive commissioned a study led by the voluntary sector to enable effective take-up strategies to be developed. It has been concluded that the best way to achieve this would be for improved data sharing between the relevant government agencies to use this information to better target advice towards those vulnerable ratepayers, particularly pensioners, most likely to qualify for the various rate reliefs. This would also make verification of information provided by claimants easier.
This was subject to further consultation and impact assessments being undertaken. The Minister for Finance and Personnel has published a consultation paper seeking views on the plans to introduce new legislation to improve data sharing which includes details of what is being proposed. Consultation will last for 12 weeks ending on 19 September. A copy of the consultation paper along with the initial privacy impact assessment is available on this website. Hard copies can be obtained by contacting rating policy division.

RATES DEFERMENT SCHEME FOR HOME OWNING PENSIONERS: CONSULTATION

A further element of the package arising from the Executive’s Review of the domestic rating system, and which was targeted at pensioners, was the introduction of a rates deferment scheme for those owning their own homes. This was subject to further consultation and impact assessments being undertaken. The Minister for Finance and Personnel has published a consultation paper seeking views on the detail of the scheme. This includes eligibility, necessary equity levels, the financial impact and the provision of independent advice. Consultation will last for 12 weeks ending on 16 September. A copy of the consultation paper along with the initial integrated impact assessment is available on this website. Hard copies can be obtained by contacting rating policy division.

RATING OF EMPTY HOMES: CONSULTATION

As part of the Executive Review of the domestic rating system it was agreed that the rating of empty homes should be introduced as soon as possible, with the preferred level of liability 100%. This was subject to further consultation and the necessary impact assessments being undertaken. The Minister for Finance and Personnel has published a consultation paper seeking views on the detailed proposals. Consultation will last for 12 weeks ending on 15 August 2008. A copy of the consultation paper, along with the initial Integrated Impact Assessment, is available on this website.

REDUCTION IN MAXIMUM CAPITAL VALUE: CONSULTATION

Another of the outcomes of the 2007 Executive Review of Domestic Rating was a proposal to reduce the maximum capital value at which domestic properties can be rated, which currently stands at £500,000. In announcing this measure to the Assembly on the 27th November 2007, the Minister, Peter Robinson MP MLA, stated that it was his view that this should be reduced to £400,000. However, before finalising any decision on the matter, the Minister wanted the proposal to be subject to further consultation, including the necessary impact assessments.
A consultation around ths proposal has been launched on Friday 4th April 2008. This will be a 12 week consultation, ending on 27th June 2008. A copy of the consultation paper along with the associated initial Integrated Impact Assessment , is available on this website.
The new domestic rating system came into operation on 1 April 2007 following a review of rating policy commissioned in 2000 by the then Executive and taken forward by Direct Rule Ministers after the suspension of the Assembly in October 2002.
On the 15th May 2007, during the first debate about the new system since the Assembly was restored on 8 May 2007, the Minister of Finance and Personnel, Peter Robinson MP, MLA (who is responsible for rating policy) said:
"I am committed to reviewing the arrangements for domestic rates in Northern Ireland. I intend, in the next few weeks, to bring a paper before the Executive setting out the steps that I propose to take. I agree with the Chairperson of the Finance and Personnel Committee that it is important that rating reform be viewed in the context of how the Executive intend to address the funding of water in Northern Ireland.In the past five years in Northern Ireland, extensive research and consultation has been conducted on the rating issue. In Great Britain, Sir Michael Lyons has recently conducted a lengthy review of local government finance. What is needed now in Northern Ireland is not a lengthy analysis but a short-term review that can deliver changes by next April and consider what further long-term steps should be taken."
The Minister made a further statement to the assembly on 11 June 2007in which he announced the publication of the Terms of Reference for the review as agreed by the Executive and the launch of a 12 week consultation which ended on 31 August 2007.'
Informed by the results of the Public Consultation and the Report from the Committee for Finance and Personnel the Minister is in the process of bringing forward a package of proposals to the Executive for agreement in late November or early December. This process has been accelerated so that some changes can be made in time for billing next year through subordinate legislation subject to the approval of the Assembly. Other changes will take longer to implement and will require primary legislation.'
The Finance Minister Peter Robinson outlined some major changes to the Domestic Rating system in the Assembly today, 27 November 2007
‘Today I am making an announcement about the outcomes of the Executive’s Review of the domestic rating system that was introduced in April this year under Direct Rule. I am pleased to be able to present these outcomes to this Assembly and fulfil a commitment I gave in June. One that I believe, taken together with other recent announcements on the Budget, will demonstrate further our commitment to making a real difference for householders in Northern Ireland.
The Minister outlined the main changes to be made (in order of delivery):
  • a 20% single pensioner discount for those ratepayers aged 70 and over living alone;
  • an increase in the savings threshold from £16,000 to £50,000 for pensioners under the existing lower income relief scheme;
  • measures to improve the take up of reliefs;
  • the introduction of a deferment scheme as a choice for pensioners who own their homes;
  • a reduction in the maximum capital value;
  • the rating of empty homes;
  • rebates to encourage the provision of energy efficiency measures for homes;
  • further evaluation and consultation on student rate relief and possible alternatives with a view to abolishing it; and lastly
  • further work on the option of introducing a derelict land tax in Northern Ireland.
For a full copy of the statement and associated press release see the press release
The outcomes paper providing more detail on the changes is now available
As part of the package of reforms announced by the Minister on the 27th November was a proposal to provide for a 20% discount in rates for pensioners aged 70 or over who live alone. The Department now wishes to consult on how best to take this measure forward, in order that it may be introduced in April 2008.

Lone Pensioner Allowance

One of the outcomes of the Executive Review of Domestic Rating, announced by the Finance Minister, Peter D. Robinson, MP, MLA on the 27 November 2007, was the decision to introduce a 20% Lone Pensioner Allowance for those aged 70 and over in April 2008. This measure was the subject of a subsequent consultation which ended on 25 January 2008. Ten consultation responses were received and have been carefully analysed. All of the responses have been published on this website, along with a copy of the original consultation report.
Informed by the outcomes of the consultation, the following key decisions have been taken in relation to the Allowance:
  • The Allowance will be application based due to data sharing limitations. The application form will be separate from that used for Housing Benefit/Rate Relief. It will also be as simple as possible. In the future, it is hoped that a more automated process can be adopted, and further work on increased data-sharing, resulting from the Executive Review, is now being taken forward by the Department.
  • The Allowance will be administered jointly by Land and Property Services (LPS) and the Northern Ireland Housing Executive (NIHE) along the same lines as Housing Benefit/Rate Relief i.e. LPS will administer the allowance for the owner-occupier sector and NIHE will administer it for the private and social rented sectors.
  • The Allowance will only be awarded against the applicant’s sole or main residence.
  • Certain persons will be disregarded from occupancy of a property for the purposes of the Allowance, namely
    • a resident carer or a person receiving care from a person aged 70 or over (subject to certain conditions such as they are not a spouse),
    • those who would normally be residing in the property but are in long term care or in hospital,
    • someone who is severally mentally impaired,
    • persons under 18 and
    • persons over 18 in respect of whom child benefit is payable.
  • The allowance will be applied after the award of other reliefs, such as Disabled Persons Allowance, Housing Benefit, Rate Relief and Transitional Relief.
  • If an applicant wishes to appeal a decision made by LPS or NIHE with regard to an application for the allowance, the first stage will be an internal review by the relevant body. If the applicant is not satisfied with the outcome of that review, there will then be a further right of appeal to the Northern Ireland Valuation Tribunal.
On the 14 March 2008 the Department made a set of Regulations entitled, the Rate Relief (Lone Pensioner Allowance) Regulations (Northern Ireland) 2008, which gave effect to these policy decisions and which will bring the Allowance into operation on 1 April 2008. Further information in relation to making an application for the allowance can be accessed through the Land and Property Services website from 1 April onwards