Non Domestic Revaluation Presentation January 2020
Why Revalue Anyway? The Basics • A tax which is based on property values needs to be kept up to date • Regular revaluations are required to reflect the changes in the market – shifts in value, land use changes, lifestyle changes, demand and supply. • If not reflecting growth or decline the tax will increasingly be seen as unfair. • Revaluation restores fairness. It is the process that brings Rateable Values back into line with April 2018 Rental Values. • Revaluation will result in a new Non Domestic Valuation List which comes into force on 1 April 2020.
NI and GB Revaluations Post-War
The Task • This is a Non-Domestic Revaluation. • Shops, offices, factories, warehouses, pubs, playing fields, power stations, cinemas, hotels, schools, hospitals……… • About 74,000 properties • Over £1,500 m of rental value • Yields over £655 m pa of business rates to fund District Council and central government services.
The Task
Not included…. • This is NOT part of the ongoing Business Rates Review – which is a fundamental examination of the system of business rates and its reliefs in NI. • Domestic property is not affected by this revaluation
AVD – the valuation date • Rateable value is our assessment of the open market rental value on a set date, the AVD. • For the previous 2015 revaluation the valuation date was 1 April 2013. • This new 2020 revaluation will set values at 1 April 2018.
It’s not about increasing business rates Rates • Revaluations are designed to be revenue neutral – its about redistributing the rate burden. • Revaluations do not increase or decrease total NI revenue • Overall growth in the List at a District council level or at a NI level does not mean more rates are levied. • The values are used only to decide how the revenue is shared out. • This is a normal, periodic adjustment to the underlying valuation base for any property based tax.
Who does what in Business Rates? • Department of Finance (DoF) responsible for policy, rate reliefs and Regional Rate poundage. • Each District Council sets its District Rate poundage. • LPS (Valuation) assess the rateable values, produces the Valuation List. • LPS (Revenues & Benefits) calculate bills using the rate poundages, apply reliefs, collect rates and then redistribute monies.
How is a Revaluation carried out? • LPS wrote to 45,000 ratepayers asking for rent and lease information. That is analysed and used to set the new rateable values. • In some cases LPS asked for trading information to help establish rateable value. There is still time to provide that information. • In other cases LPS used building costs and land values. • Aim is always to establish rental value as at 1 April 2018.
The overall outcome 2015 2020 NI - Overall Growth Total NAV £1,560m £1,667m 1.068 (6.8%)
Outcome by Sector Vs Overall NI growth • All properties 1.068 • Offices 1.08 • Manufacturing 1.02 • Warehouses 1.02 • Retail 0.99
Changes in NAV – all Properties 35000 30000 25000 20000 30160 15000 25687 10000 12309 5000 5704 0 NAV Decreased NAV No Change NAV Increased < 6.8% NAV Increased > 6.8%
The rate bill formula • LPS supplies the Values, the Councils set the poundage based on the revenue they want to raise. The district and regional rate - added together become the rate poundage used to calculate the rate bills. • Rate poundages are key to working out if rates will increase or decrease. • If the total values in a district area increase, the council has the opportunity to reduce the rate poundage • If the total values in a district area decrease, the council has the opportunity to raise the rate poundage
Rate Liability • Rate liability can only be worked out when poundages are known – usually mid February. • Jan-March - changes to individual NAVs compared to NI and Council averages will be used by LPS to give ratepayers an indication of their new liability. • Entitlement to existing reliefs and exemptions unchanged. • 43,700 (59.2%) of properties have a change in value less than the overall NI growth of 6.8%.
For the ratepayer • An increase in the NAV of a property does not necessarily mean an increased rate bill. • Increases or decreases in rate bills depends on relativity to the overall average change in the Valuation List, and the new poundages. • If my individual rateable value increases more than the average and yours decreases below the average – I may pay more, you pay less!
Key Dates • Nov 2019: New values with Councils for District Rate setting. • 7 Jan 2020: Draft values online. • Feb 2020: District and Regional Rate poundages struck. • By 31 March 2020: New Valuation List published online. • April 2020: Rate bills issued using new values.
Summary Valuations online Draft schedule: 7 Jan 2020
What do we want ratepayers to do? • Go online at www.finance-ni.gov.uk/reval-2020-ni • Find your valuation ……. ask yourself….“could my property have let for this amount in April 2018?” • If yes – nothing further required. • If any concerns – check your details and similar properties in your locality. • Remaining concerns? Contact LPS by email or phone or drop in to a Reval2020 event in Jan-Feb across NI.
Draft Values & Valuation List - Spatial NI
Find out more • www.finance-ni.gov.uk/reval-2020-ni • About Reval2020 • FAQs and videos • Information events Thank you.
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