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Peter plans to give pensioners a break on high rates bills

By Chris Thornton

Property tax breaks for pensioners will have "an immediate and positive impact", Finance Minister Peter Robinson said yesterday as he announced a package of measures to ease rates bills for older people.

Many pensioners will see their bills eased by next April - but measures affecting other ratepayers will have to wait until 2009, when Mr Robinson may cut bills for some of Northern Ireland's richer homeowners.

The Finance Minister yesterday outlined to Assembly members his plans for reforming the rates system introduced by direct rule Ministers earlier this year.

The new system - which came on top of big annual increases in the regional rate - started basing bills on the value of a house.

Department of Finance officials said pensioners were among the hardest hit by the changes, in part because they are on fixed incomes and the value of their homes skyrocketed over the years since they bought them.

Mr Robinson said the safeguards for pensioners will be introduced at "a relatively modest cost" - which could cut about £4m out of the £480m the Executive raises through regional rates. The regional rate - which does not include the portion of bills set by local councils - climbed by 62% over the past five years under direct rule.

Mr Robinson has announced he wants to halt any more increases for the next three years.

Yesterday he told the Assembly that he will introduce a 20% discount on rates bills for people over 70 who live alone.

Officials are targeting the hardest pressed pensioners because Department of Finance research shows that pensioners below the age of 70 and those living with others tend to be better off.

The minister will also increase the savings threshold for the current pensioners' relief scheme from £16,000 to £50,000 - meaning more older people with savings will qualify.

Mr Robinson also wants to lower the cap for rates bills which will give about 5,000 people who live in above-average houses about £400 off their rates bills.

Currently rates bills are capped for homes worth more than £500,000. Mr Robinson suggested yesterday that the cap be lowered to homes worth £400,000 - a move that will wipe £2m off rates revenue.

But Mr Robinson believes the lower cap will bring maximum bills closer to the highest average council tax bill in England. But he may have to push the measure through the Assembly in order to introduce it in April 2009.

The minister also announced a deferment scheme that will allow pensioners to roll up their rates bills against the equity in their homes - meaning they won't have to pay those bills until they sell the house or die.

The Finance Minister said he is also looking at other reforms to bring in over the long term, including rates charges for empty houses, a measure that could bring in more than £10m a year and offset the revenue lost of the tax breaks.

He indicated he may also scrap rates relief for student homes since it is widely believed the savings go straight to landlords.

Mr Robinson said he will take a look at a derelict land tax and rates rebates for 'green' homes.

"I believe that the proposals being announced today will make a real and beneficial difference for many ratepayers and, taken together with the budget proposals, will offer many households much-needed relief," Mr Robinson said.

"Much work remains to be done to see this process through to its conclusion but in making these changes we are returning the faith that people demonstrated in sending us here."

Belfast Telegraph


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