Minister announces reduction in landlord rating allowance

Finance Minister, Sammy Wilson, has reduced the landlord rating allowance to 10% for housing associations and 12.5% for private sector landlords from 1 April 2012.
~ Thursday, 1 December 2011

The Minister was speaking following approval of the Rates (Payments by Owners by Agreement) (Amendment) Order (Northern Ireland) 2011 in the Assembly. This follows a public consultation last year on the level of the landlord rating allowance.

The Minister said: “At present a rating allowance is awarded where a landlord enters into an agreement to pay rates on their property. The voluntary allowance recognises that landlord collection is more cost effective than direct collection by Land and Property Services (LPS).

“This legislation will not impact on tenants. It merely reduces the allowance payable to Housing Associations to 10%, and that payable to private sector landlords to 12.5%, in line with previous announcements. The current level of 15% is simply too generous, particularly given the fact that landlords would, as with all other property owners, now be liable for empty property rates.”

With the introduction of the rating of empty homes in October 2011 100% rates will apply to all domestic property. There will generally be no difference between the occupied and vacant liability for that property. As a result it would be inequitable to maintain the current level of voluntary landlord allowance, given that part of the allowance is compensation for being unable to claim a vacancy. With the rating of empty homes vacancies cannot be claimed and therefore it would be inappropriate to retain this element of the allowance.

Separate legislation was brought forward last year to deal with the reduction in the landlord rating allowance for the Northern Ireland Housing Executive. That legislation reduced the level of allowance to 10% for the Northern Ireland Housing Executive with effect from 1 April 2011.

Notes to editors:

1. Consultation on the reducing the voluntary landlord rating allowance was undertaken between July and October 2010. A copy of the consultation document is available on the Rating Review section of the DFP website.
2. The voluntary landlord allowance for the private rented sector and Housing Associations is currently 15%. The Executive approved the reduction in the landlord allowance for the three rental sectors.
3. The reduction in Article 21 landlord allowance for private rented sector landlords and housing associations will provide savings of around £1million in 2012/2013; a sum that is split fairly evenly between the Executive and district councils.
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