What is a non-domestic rates revaluation?
A revaluation is the process by which rateable values are brought into line with property rental values at the valuation date. Reval2023 revalued all business properties in Northern Ireland for rates.
Revaluations form part of the normal cycle of a property-based business rates system. In June 2021, the finance minister announced a revaluation of all 74,750 non-domestic properties, delivering on the commitment for more frequent revaluations here. This ensures that business rates stay up to date and reflect local economic changes by distributing rate liability fairly across all sectors in line with changes in rental values.
It is important to note that your rating valuation is not the same as your bill.
When was the last non-domestic revaluation?
The last revaluation prior to Reval2023 was in 2020 and is based on April 2018 rental values.
Following Reval2023, the rateable value of all business properties are in line with October 2021 rental values. Rate bills issued from 1 April 2023 are based on Reval2023 valuations.
It is important to note that your rating valuation is not the same as your bill.
Why hold a revaluation now?
A revaluation ensures that rateable values reflect changes in the property market and are based on up to date information. It will distribute the rate liability fairly across all sectors and locations, in line with changes to rental values.
Social, economic, and environmental circumstances change over time and do not affect all property sectors or geographical areas in the same way. If we use rateable values based on outdated levels of rents, it undermines the fairness and equality of the system.
What is a rateable value?
A rateable value (also known as net annual value) is an estimate of the open market rental value of a property at a certain valuation date. The valuation date is set by legislation. For NI Reval2023 the valuation date was 1 October 2021.
How is my rateable value calculated?
In October 2021 LPS issued Rent and lease Questionnaires (RALQs) to the occupiers of most non domestic properties, which requested lease and rent details. In some cases, LPS requested information on trading and accounts from pubs, hotels, caravan sites, quarries, B&Bs. The rental information provided was reviewed and analysed to produce new rateable values.
These values were used to calculate rate bills from 1 April 2023.
How is my rate bill calculated?
The valuation details presented in the draft schedule is not your rate bill.
For further information on how rate bills are calculated visit How business rates are calculated.
What do rates pay for?
The money collected through rates contributes to the services provided by Government such as Health, Education, justice and emergency services.
For district council areas they contribute to the services provided by Councils such as leisure facilities, tourism and waste management.
How long did this revaluation take?
Reval2023 took two years to complete. The process to gather rental information from businesses began in October 2021. LPS issued letters to the majority of non domestic properties inviting them to complete a Rent & Lease questionnaire (RALQ), either an online or paper version. The rental information provided was reviewed and analysed to produce new rateable values.
Is the revaluation about collecting more money?
The amount of money to be raised through rates has not change as a direct result of Reval2023. The purpose of a revaluation is not to raise more revenue, but to maintain fairness in the rating system by rebalancing business rates based on up to date rental values. Decisions on the total amount of revenue to be raised through rates lie with the Department of Finance and District Councils through the regional and district rate setting process.
What impact will the revaluation have on my rate bill?
As a result of the revaluation many business rate bills may change but some will stay the same.
The valuation details are only one part of the rate bill calculation. The other parts are the regional rate (set by Northern Ireland Executive), and the district rate (set by the district council where the property is located).
The total amount of revenue to be raised through rates in general terms does not change as a direct result of Reval2023. This revenue is the total amount of money needed to be raised from rates to pay for public services such as health, education, and infrastructure as well as leisure facilities, tourism and waste management.
Even if the total revenue being collected remains the same, what may change is the proportion of the burden each ratepayer contributes. In general terms the impact on business ratepayers will depend on the relative changes in local rental values from the last non-domestic revaluation (that is from the valuation date of 1 April 2018).
What help is available to those struggling to pay their rate bill?
There are a number of reliefs available to business ratepayers, more information is available at NI Business Info: Help available for business rates.
How will my property be valued?
There are three industry standard methods to assess a rental value:
LPS analyses all actual rents collected, this method is used for the majority of properties such as shops, offices, warehouses and factories.
Receipts and Expenditure method
LPS analyses trading information such as turnover or throughput. This method is used to assess the rental value of a property where there is limited or no rental evidence available and the property’s rental value is related to its level of trade. A pub would be an example.
LPS analyses building costs and land values, this method is used to assess the rental value of a property where there is no rental or trading information available, for example a school or hospital.
Will domestic properties be revalued?
There are no plans to have a domestic revaluation.
Do online retailers pay rates?
Yes. Rates are a tax on the occupation of property. If an online retailer occupies a property in Northern Ireland they are liable for the rates on that property.
Why do businesses see increases or decreases in their valuations after a revaluation exercise?
The basis of valuation for non-domestic properties is their estimated rental value at the valuation date. This is set by legislation. Only the factors that are known by a landlord and a tenant when they agree on a rent can be considered when valuing a property.
Reval2023 reflected market changes that took place between the last valuation date of 1 April 2018 and the new valuation date of 1 October 2021. If the evidence collected showed rents had increased between the two valuation dates, then the net annual values will have increased. Similarly if the evidence shows that rents had decreased, the net annual values will have decreased.
LPS asked non-domestic occupiers to complete a Rent & Lease Questionnaire. The information that was returned was analysed and used to develop the new rateable valuations.
If the total amount of rate revenue that needs to be raised remains unchanged, Net Annual Values (NAVs) that have a higher increase than the average percentage change in total rateable values will pay more in rates. Conversely, NAVs with a percentage change that is lower than the average percentage change will pay less.
How do I request a review if I think my valuation is inaccurate?
If you think that your valuation is inaccurate you can submit an application for a property valuation review. This can be submitted at any time after the 1 April 2023 and the application form can be found on NI Business Info: Property changes and business rates
On receipt of an application the District Valuer’s office will contact you to arrange an inspection and discuss any concerns you may have. It is important to make you aware that requesting a revision of the valuation list may also lead to an increase in the valuation of your property.
Will Reval2023 change the system used to calculate rates on non-domestic properties?
NI Reval2023 did not review or reform the rating system for non-domestic properties. Decisions on rates reform are a matter for the NI Executive. NI Reval2023 was a revaluation exercise to rebalance the rates liability fairly across all business sectors in line with changes to rental values that have occurred since the previous revaluation.
The previous valuation list is based upon a valuation date of 1 April 2018. After NI Reval2023 the valuation date became 1 October 2021.
How are rates bills calculated?
A rateable valuation is known as a net annual value (NAV). To arrive at your rates bill the NAV is multiplied by a combination of the district and regional rates in the pound (rate poundages). The rate poundages are reviewed annually to pay for critical frontline and local services.
The district rate is set by the 11 district councils. Each council area sets their own rate.
The regional rate is determined by the Department of Finance.
As example of how a rates bill is calculated is shown below. It is based on a non domestic property in Belfast City Council area with a valuation of £50,000, a regional rate of 0.279, and a district rate of 0.264147:
Net Annual Value x (Regional Rate+ District Rate) = Rates Bill
£50,000 x (0.279 + 0.264147) = £27,157*
*Based on 2021/22 Rate Poundages
You can find further information on the NI Business Info website at How business rates are calculated.
If my property is reduced in value following NI Reval2023 will this lead to a reduction in my rate bills?
No. The valuation produced by Reval2023 is only one part of the rates calculation process and the impact on individual rate bills are also affected by the rate poundages.
There are two elements to a rate poundage:
- A District Rate – Each District Council sets its own rate.
- A Regional Rate – A regional rate set by the NI Executive
Reval2023 was a revaluation exercise to rebalance rates liability fairly across all business sectors. Even if property values following Reval2023 declined or increased, the NI Executive and NI district councils can adjust the regional rate or district rate each year to raise money to pay for public services.
Is the information I supply covered by Data Protection Legislation?
Yes, all the information gathered from the questionnaire is subject to the Data Protection Act and General Data Protection Regulation. LPS will use the information you supply for rating and valuation purposes and maintenance of your rate account. Your information will not be disclosed to third parties or other government departments unless the law requires or allows LPS to do so.
More information can be found in the LPS Privacy Notices.
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