Changes to rating allowances for landlords

New legislation will alter the rating discounts available to landlords who pay rates in a lump sum. 

Article 20 and 21 of the Rates (Northern Ireland) Order 1977 allow certain landlords to avail of a discount on their annual rates bill if all rates due on their rental properties are paid in a lump sum by the end of September each year.    Landlords who wish to avail of these discounts have to create either an Article 20 or an Article 21 account with Land & Property Services. 

The type of account available to landlords will depend on the capital value of each of the properties bundled into the account and whether or not these properties are classed as Houses in Multiple Occupation. Historically, an Article 21 account has always offered a more generous discount. 

Standardisation of discount for landlords

The Rates (Owners Allowances) Order (Northern Ireland) 2015 will increase the discount available on Article 20 accounts to 10% from 7.5% and will decrease the discount available on Article 21 accounts from 12.5% to 10%.  These discounts will take effect on 1 April 2015, but will not apply to any rates in respect of years ending before that date. 

Rating issues in the private rented sector

Rates can be a cause for concern among private tenants and landlords.  It is important that both parties to a tenancy agreement understand both who is legally responsible and who is contractually responsible for payment of rates, as liability for payment can often be transferred from one party to another by the terms of a tenancy agreement.  However, the tenancy agreement does not absolve the person who is legally responsible for paying the rates from prosecution by LPS if the debt remains unpaid.  Tenants who have been affected by this type of problem should contact Housing Rights Service or another advice agency for assistance immediately. 

Rates rebate consultation

The Department for Finance and Personnel plans to establish a new rate rebate system which will be more compatible with Universal Credit once it is introduced. Housing Rights Sevice and the Law Centre for Northern Ireland have jointly responded to the Department's consultation.