Non Domestic Revaluation Presentation January 2020 Why Revalue - - PowerPoint PPT Presentation

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
• n 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

• 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.

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. Who does what in Business Rates?

• 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.

How is a Revaluation carried out?

The overall outcome 2015 2020 NI - Overall Growth Total NAV £1,560m £1,667m 1.068 (6.8%)

• All properties

1.068

• Offices

1.08

• Manufacturing

1.02

• Warehouses

1.02

• Retail

0.99 Outcome by Sector Vs Overall NI growth

Changes in NAV – all Properties

12309 25687 5704 30160

5000 10000 15000 20000 25000 30000 35000

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
• verall 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.