Robinson proposes cutting cap on domestic rates

The North's Finance Minister Peter Robinson has proposed lowering the cap on domestic rates, which will provide relief for 500 homeowners living in relatively affluent areas of Northern Ireland.

He proposed in the Assembly yesterday that the rating cap should drop from £500,000 (€697,000) to £400,000 at a cost to the Northern exchequer of £2 million. This would benefit 500 people, he told MLAs.

Domestic rates in Northern Ireland have increased significantly in recent years, triggering a number of protest campaigns.

Initially it was proposed under direct rule that there would be no cap on house values, which would have led to "astronomic" rate bills for people owning expensive houses in "leafier" areas of Northern Ireland.

This was at odds with England and Wales, where there is a cap. Comparisons were made that the then British prime minister Tony Blair and David Beckham and Posh Spice would pay a maximum bill of £2,800 in England, while those with houses valued at £1 million or more in the North would pay several thousand pounds more for their bills.

Accordingly, it was proposed to create a cap of £500,000 by former direct rule minister David Hanson. This is now to be reduced to £400,000 by April 2009 under Mr Robinson's proposal. Maximum bills in the North are around £2,500 annually.

Mr Robinson also announced that in addition to normal reliefs, people aged 70 and over and living alone will pay 20 per cent less in rates. Moreover, pensioners will be allowed to hold savings of up to £50,000, rather than £16,000 at present, and still claim rates relief.

Mr Robinson also said that measures would be taken to encourage more people to avail of rates relief, as only half of those entitled to these supports took them up.

Mr Robinson is further proposing a rates holiday for first-time purchasers of new "zero-carbon houses". This could free those with "green" houses from rates for three to five years. However, no such homes have yet been designated in Northern Ireland as the British treasury has yet to decide what would constitute a zero-carbon house.