Rates winners and losers revealed
The winners and losers of a re-evaluation of non-domestic rates bills in Northern Ireland have been revealed.
Some could see their bills potentially cut by more than half under the re-assessment but others are facing a dramatic hike.
At least one pub is staring at a seven fold rise in its bill while electricity provider NIE is also going to be hit by a significant increase after its network infrastructure was valued much higher than the last time rates were re-calculated.
That exercise was carried out in 2003, based on 2001 property market data, so the latest re-evaluation has been promoted by the Northern Ireland Executive as a much-needed re-balancing of the system to reflect the changes in the property market since the turn of the century.
The 73,000 non-domestic properties in Northern Ireland encompass a wide range of sectors, including office space, retail, warehouses, industrial premises, utilities and public sector owned buildings.
The re-evaluation is not seeking to increase the revenue generated from rates, rather than to re-distribute who pays what.
The draft re-evaluations, which are subject to potential change, will result in around 49% of non-domestic properties commanding lower rates, with 51% subject to higher bills.
The findings essentially reflect the changes in how and where people shop, work and socialise since 2003.
Large edge of town superstores are facing significant increases in their bills whilst small retail outlets in city and town centres that are perhaps not as popular with customers as they once were will see their rates burden eased somewhat.
Finance Minister Simon Hamilton welcomed the online release of the draft rateable values.
His department's Land & Property Services (LPS) completed the revaluation using market evidence from 2013.
The final values will only be set once the Northern Ireland Executive and district councils strike their agreed rates for the forthcoming financial year.
The new values will be used to calculate business rate bills from 1 April 2015.
Mr Hamilton said the release of the figures provided ratepayers early information and the opportunity to review the draft values.
"Rates provide funding for essential regional services such as health and education as well as district council services like cemeteries, parks and leisure facilities," he said.
"The revaluation means that from next year, ratepayers will contribute to the funding of services relative to their 2013 rental value, instead of 2001 values as at present."
The non-domestic rates contribute around £600 million a year to regional and local services in Northern Ireland.
Overall the value of non-domestic properties in the region has risen by about 8% since 2001, from £1.42 billion to £1.54 billion.
"This growth of course does not translate into a corresponding overall increase in rate bills, revaluations are revenue neutral," explained Mr Hamilton.
"The Executive and new councils will not raise any more money because of the revaluation. However, the amount raised will be redistributed between non-domestic ratepayers on a fairer basis using modern rental values."
He added: "The valuation results are very much as expected. There has been growth in the value of some sectors since 2001, so those business ratepayers are likely to see an increase in their rate bill; some rateable values are substantially lower and this will probably be translated into lower rate bills. Many won't notice any real difference. Initial analysis shows that some 49% of properties show a change in value less than the overall average Northern Ireland growth factor of 8%. This means that if these values had been used in 2014/15 those ratepayers would have seen a decrease in their rate bill."
Colin Neill, chief executive of Pubs of Ulster, noted that businesses in the regenerated Cathedral Quarter of Belfast would be facing higher bills as a result of the area's new-found popularity.
"We have been expecting a revaluation of business rates for some time now, so our members have been anticipating this news and the effect it will have on their businesses," he said.
"The news today from the Finance Minister has shown there are winners and losers. The regenerated Cathedral Quarter has seen an increase in non-domestic rates which is clearly reflective of the growth in that area in recent years. That will be a tough pill for those businesses to swallow, however.
"We welcome the fact that some of the licensed trade will see a reduction in their rates and, certainly in the majority of cases, these processes are revenue neutral for businesses.
"This however is based on an initial review of the figures and we will need to take a deeper look to see the real impact of this. A bigger concern for the hospitality industry will be how the new councils strike their district rates in the coming months."
Royal Institute of Chartered Surveyors (RICS) Northern Ireland praised the fact that bill-payers had been given time to assess the draft values before next April.
RICS spokeswoman on rating, Tracy Flannigan, said: "RICS welcomes the early publication of the schedule of draft values to help give businesses an early opportunity to assess whether their new rateable value represents a fair rental estimate.
"There hasn't been a non-domestic rating revaluation since 2003, which means that rates are currently being charged based on rental values from more than a decade ago. Whilst the revaluation is intended to be revenue-neutral, changes in the market since the last revaluation will mean that some businesses will potentially face higher rates bills."
She added: "It is important that Land & Property Services continues to communicate clearly with businesses so that they know where they stand and when they can appeal their rateable value if they feel that it doesn't represent a fair estimate."