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Proposed reduction in landlord allowances - 8 July 2010

Proposed reduction in landlord allowance announced

Finance Minister, Sammy Wilson, has announced proposals to reduce the landlord allowance on rates collection.

The Article 21 allowance, which provides a discount to landlords who volunteer to collect all rates due on their properties and pay for vacancies, is proposed to change from next April.

Explaining the reason for this move, Mr Wilson said:

“Where a landlord enters into an agreement to pay rates on their property a 15% allowance is currently awarded, compensating landlords for collecting rates on the Department’s behalf.  In addition, rates are paid whether the property is occupied or not.  From next year, with the rating of empty homes at 100%, it would be unfair, to other ratepayers, to maintain the allowance at 15% as all vacancies will be charged for.”

The Minister stated that he had taken account of a range of issues, including the turnover level of properties, which tends to be highest in the private rented sector, and likely collection difficulties.

He continued:  “I am therefore proposing to reduce the voluntary allowance to 12.5% in the private rented sector and 10% for Housing Associations and the Northern Ireland Housing Executive.  Views are also being sought on the landlord allowance for the small number of non domestic properties affected.

“This change will have the added benefit of providing additional rates income of around £3m per year and should not have any impact on tenants.

“The consultation paper published today sets out the background to the issue and proposals for this area.  Following consultation I will make decisions on the way forward, with the necessary legislation subject to Assembly approval.  Any changes will be effective from 1 April 2011 and will apply to both current and new agreements with my Department.

The Minister also reminded landlords and tenants to be aware of their obligations, in terms of paying rates.  “If you own or occupy a rented property, you need to be sure who is responsible for paying rates.  This is set down in law, which overrides the provisions of any tenancy agreement.  If there is any doubt you should contact Land and Property Services on 101.  Further information can also be found on their website (http://www.nidirect.gov.uk/ratesbook_2010.pdf).”

Consultation on the proposals will run until 28 October 2010.