CIH NI response to the Department of Finance supplementary consultation on domestic rating measures

CIH Northern Ireland appreciates the chance to provide feedback on the proposed adjustments to the domestic rating system, given its impact on housing affordability and the provision of services. We understand that these proposals aim to generate additional revenue and modernise certain aspects of the system. Our response considers both the need for sustainable public finances and the potential impacts on households across Northern Ireland.

Proposal one: Increasing the maximum capital value cap (‘the cap’ or ‘max cap’) within the domestic rating system from £400,000 to £485,000

CIH Northern Ireland acknowledges the proposal to increase the maximum capital value cap to £485,000, recognising the intent to align NI's highest domestic rates bill with Great Britain's highest council tax bill.

CIH Northern Ireland notes the current cap's relevance is questionable, as NI's highest domestic rate bill (£4,219) is below Great Britain's maximum council tax bill (£5,090), suggesting an upward cap adjustment is warranted to restore the original policy rationale of linking with the council tax system.

CIH Northern Ireland also observes that the existing £400,000 cap results in higher-value property owners effectively paying proportionately less in rates than those with middle or lower-value homes. Increasing the cap to £485,000 would contribute to a fairer system by reducing this disparity.

We support increasing the cap to £485,000. This would move the system closer to parity with Great Britain and promote a more equitable distribution of rates.

Proposal two: Reduction in the early payment discount from four per cent to two per cent

CIH Northern Ireland acknowledges the proposal to reduce the early payment discount from four per cent to two per cent.

In our previous consultation, CIH Northern Ireland supported removing the early payment discount. The screening document highlights the proposal's primary objective as revenue raising (anticipated £4 million savings). It also notes the discount isn't a tax relief but an incentive, and the department's preferred payment method is now direct debit due to lower costs.

While the proposal is to reduce the discount to two per cent rather than remove it, CIH Northern Ireland maintains that the long-term goal should be removal. The screening document assesses the reduction as not expected to adversely impact any Section 75 groupings.

CIH Northern Ireland reiterates that removing the discount would be financially prudent. We recognise the proposed reduction as a step toward that and urge the department to monitor the impact and proceed with full removal.