Domestic rates in Northern Ireland

How do domestic rates work?

The bill is the property's capital value multiplied by two rates added together: the regional rate, set by the Executive and the same across Northern Ireland, and the district rate, set by each of the eleven councils. Both are expressed as pence in the pound.

The critical difference from council tax is that there are no bands. A home worth twice as much pays twice as much, all the way up, subject to a cap on very high values. Under council tax the top band pays only about twice the Band D rate however valuable the property, which is why council tax takes a far larger share of a cheap home's value than an expensive one's.

Northern Ireland also revalued more recently. Domestic rates use 2005 capital values; England and Scotland still use 1991 bands.

Why is it different?

Northern Ireland kept the old domestic rating system when Great Britain moved to the Community Charge in 1990 and then to council tax in 1993. Local government in Northern Ireland has always had a narrower range of functions, and rating was administered centrally, so there was less pressure to change. A 2007 reform introduced the current capital value basis rather than replacing rates with council tax.

• 1990Great Britain replaces domestic rates with the Community Charge. Northern Ireland keeps rates.
• 1993Council tax replaces the Community Charge in Great Britain, on 1991 values.
• 2003Wales revalues for council tax and adds Band I.
• 2007Northern Ireland’s reform moves domestic rates onto capital values, set at 1 January 2005.

Which system is fairer?

Rates are more proportional to property value, which most tax economists regard as the better design. They are also more recently valued. Against that, a proportional charge with no bands produces very large bills at the top of the market, and Northern Ireland caps the value used for exactly that reason, which reintroduces some of the regressivity it avoided.

The more useful comparison is with England, where the case for revaluation is widely accepted and has not been acted on since 1991. Northern Ireland demonstrates that revaluation is politically possible; Wales, which revalued in 2003, demonstrates it too. Council tax sets out why England has not followed.

Where can you check your own bill?

Land and Property Services publishes the capital value of every property and the current regional and district rates. See nidirect on understanding rates.