Robinson seeks views on lowering the cap on rates

The Executive is seeking opinions from the public about reducing the maximum capital value rates levy applied to properties here.

The Finance Minister, the Rt Hon Peter Robinson, MP, MLA announced the publication today of a consultation paper seeking views on reducing the maximum capital value, or ‘cap’, that applies for rating purposes from £500,000 to £400,000.

Mr Robinson said he was hoping for the fullest possible response:

"I want as wide a range of organisations and individuals as possible to provide their views on a reduction in the cap," he said. "The views I am seeking should focus on the impact upon ratepayers and district councils of such a reduction and on the initial impact assessments that have been undertaken. Taken together they can help shape final decisions."

The Minister said it was the Executive’s view that there would be merit in a cap lower than the current level of £500,000, which equates to the highest council tax bill in England:

"I believe that £400,000 may be a much more appropriate level for the cap. Pitching it at that level would bring the highest bills under the rating system in Northern Ireland into line with the average bills within the highest band under the English council tax system.

"A reduction would be beneficial in allaying fears about the impact that the new system has had on those in higher value properties and on pensioners in particular.

"I also think there is merit in the argument that as rates pay for services there should be recognition that there is a limit to the benefit that ratepayers can derive from those services. On this basis a £400,000 threshold might be more appropriate."

The consultation paper highlights the number of properties that would be affected, the associated revenue loss and changes in average rate bills. The Minister stressed the importance of obtaining views on the initial impact assessments.

"These have shown that the impact on other ratepayers of a reduction in the cap is negligible, particularly in the context of my freeze on domestic regional rates over the Comprehensive Spending Review period."

It is anticipated that, if implemented the proposed change would take place from April 2009. He emphasised that a lower cap was part of a wider package of reforms:

"The Executive has agreed a range of measures to make the rating system more acceptable to ratepayers, including a new allowance for lone pensioners, an increase in the saving limit for pensioners and addressing the issue of relief uptake."

Notes to Editors:

1. In total around 5000 ratepayers would benefit from a cap set at £400,000. It would cost in the region of £4.9 million.

2. Copies of the consultation paper and initial impact assessments will be available on the Review of Rating Policy website later today: http://www.ratingreviewni.gov.uk

Hard copies can also be provided on request by contacting Rating Policy Division.

3. Consultation will last for 12 weeks, ending on 27 June 2008.

4. Written responses should be sent to:

Rating Policy Division
Department of Finance and Personnel
Room D12, Decant Annex
Rathgael House
Balloo Road
Bangor
BT19 7NA

E-mail responses may be sent to: ratingpolicy@cfg.dfpni.gov.uk
Alternatively, responses may be faxed to: 028 9185 8008.

5. Media enquiries only to DFP Communications Office on: 028 9052 7644 or 028 9052 7375.
Out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned