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Rates shake-up: Thousands of Northern Ireland homes facing higher bills

Higher bills for 'rich' as £400k cap goes and enhanced relief for business, meanwhile impact of Brexit vote on education system and pension schemes is becoming clearer

By Noel McAdam

Published 23/11/2016

Mairtin O Muilleoir
Mairtin O Muilleoir
Emma Little Pengelly

Around 7,000 Northern Ireland homes are set to face higher rates bills in a revamp that will raise millions of pounds for the Executive.

Finance Minister Mairtin O Muilleoir insisted the shake-up will increase fairness and ensure the burden is more "broadly shouldered" - but was warned it will "cause trouble".

The province's councils will also be able to raise up to £10m by striking their own non-domestic rates in future - breaking the historic link with the overall rates system.

More: Top Brexit adviser in call for coherent plan from Executive

And he plans a new scheme for small businesses, particularly in the retail and hospitality sector, which would become eligible for a rates discount averaging 40%.

In the biggest single change, the current cap on rateable house values is to be removed under the proposals set out by Mr O Muilleoir in the Assembly yesterday.

At present a house with a rateable value of more than £400,000 is still assessed at the £400,000 level. In future, rates would also apply to the portion above £400,000, raising £4.5m for Executive coffers.

Other measures, including an end to the discount for early payments and the introduction of rates bills for charity shops, would bring the total up to over £16m for the Executive every year - "money that will help deliver the Executive's Programme for Government for all our citizens", he said.

More: Mairtin O Muilleoir: Modernisation of Northern Ireland's rates system will help generate jobs and boost high street

"The application of the £400,000 cap means that those in houses with a higher value pay proportionately less than those in middle or lower value homes," the Sinn Fein minister told MLAs.

"This to me is inherently unfair. Take Bill Gates's house - I know that many people would like to take the house of Bill Gates - he pays $1m a year in property tax on his $100m Washington home. If he lived here, the rates on that home would be less than $5,000 a year."

But the DUP chair of the Assembly finance committee, Emma Little Pengelly, said the rates cap proposal would "create concern" and asked the minister to explain his proposals in greater detail at a future committee session.

Her party colleague Jim Wells also warned the cap will "cause trouble".

More: Northern Ireland's very distinct, bespoke needs must be addressed: Brexit Advisory Panel chair

The minister responded: "We need to nail our colours to the mast on the removal of the cap. We are either for it or against it."

Alliance MLA Stephen Farry accused Sinn Fein of performing a u-turn on the issue of a rates cap.

Mr O Muilleoir replied: "I thought that it was really important to stop faffing around and to try to focus on actions that will result in better outcomes for our people."

He went on: "Taken together, these measures will actually lead to a revenue gain for the Executive and for our councils.

"Current estimates are up to £16m a year, recurring, for the Executive.

"Councils stand to gain up to £10m a year and this will help them deliver better outcomes in terms of local services, as well as their new role in place shaping, building communities and economic development."

The proposed small business rate relief scheme, likely to run for three years, would give up to 40% support to 13,000 businesses, including shops in provincial towns which previously missed out.

But around 10,000 properties, such as offices located above shops, will still not be eligible.

On the vexed issue of introducing rates to charity shops, Mr O Muilleoir said the important issue was to "get the balance right".

"Charity shops help to bring people into our high streets or small towns, in particular when times are tough, so we need to make sure we don't upset the healthy retail mix that exists in many areas," he said.

"I am all in favour of continuing to single out charity shops on the high street for favourable treatment, but I do think there is a case for limiting their growth. We cannot have our high streets just made up of charity shops."

He also proposed two pilot schemes to regenerate deprived areas of east and west Belfast, to be called business empowerment zones. These will begin in the lower Newtownards and lower Falls Roads and will provide special rates relief to encourage business and investment.

Mr O Muilleoir said: "Having worked extensively in both areas, I know that the will is there to transform these key arterial roads".

If successful, similar schemes may be trialled in a rural area.

Stephen Kelly, chief executive of Manufacturing NI, said: "Everyone paying something, more regular revaluations, more flexibility for councils and business rates and securing reliefs which will help economic development, are principles which we have called for."

Belfast Telegraph

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