Belfast, Northern Ireland – Northern Ireland’s finance minister, Caoimhe Archibald, has proposed raising rates bills for the 8,000 most valuable homes in the region by lifting the current cap on rateable property values. This change aims to create a fairer rating system, particularly for households in affluent areas that currently pay the same rates as more modest homes.
Currently, the rateable value for houses is capped at a 2005 valuation of £400,000, meaning high-value properties, such as those in north Down, pay significantly lower rates compared to their market value. The highest domestic rates bill in Northern Ireland currently stands at around £4,200.
Archibald intends to seek agreement from the Executive to implement this change in 2025, describing it as a “proportionate elevation” of the cap. The proposal is part of a broader package aimed at creating a “fair, progressive, and equitable” rating system.
Key Points of the Proposal
- Lone Pensioner Allowance: This non-means tested benefit, which provides a 20% reduction in rates for lone householders aged over 70, will remain in place.
- Support for Low-Income Ratepayers: Additional measures to assist those on low incomes will also continue.
- Revaluation of Domestic Properties: The last revaluation occurred in 2006, and while this new exercise would be revenue neutral, it aims to ensure fair distribution of rates.
Archibald noted that while some homeowners may see higher bills, others may benefit from lower rates, emphasizing that the goal is to achieve fairness across the system.
Broader Financial Context
Archibald also addressed the upcoming Westminster budget, advocating for the Chancellor to uphold the promise of “no return to austerity.” The Executive is expecting an additional £500 million from the government for 2024, which would enable a budget reallocation exercise known as a monitoring round. A draft budget for 2025/26 is expected to be published by the end of 2024, followed by a 12-week public consultation.
Analysis of the Proposal
The proposed increase in the rates cap is seen as a modest adjustment aimed at ensuring higher-value homes contribute a fairer share. Previous discussions about entirely removing the cap could have resulted in significantly higher bills for some homeowners, potentially reaching £25,000 annually. The current proposal seeks a more measured approach, maintaining a cap while increasing rates for the wealthiest homeowners.
Support from the rest of the Executive will be crucial for the proposal to be enacted before the new financial year begins in April 2025.