Rates Reform to Face Another Consultation

Despite being approved by Tynwald last year, the Rates Modernisation Report has still not been significantly progressed and the gov is planning a further consultation, it was revealed in Keys this week.

The report was designed to modernise the island’s rate system which is widely accepted as being long out of date and needing reform.

Policy and Reform Minister Ray Harmer, who is responsible for the reforms, said a further consultation is required on the plans with more detailed examples of how a modified area rating method would work.

While it isn’t the sexiest of political news, the rates reform will have a wide ranging impact on all of us who live and work on the island as it directly affects how much we pay to live in our homes.

Rates are paid by residents to the local authorities for services such as water, bins and other amenities. At the moment, they are based on a property’s rental value using pricing and a formula devised in the 1960s. The new rateable values will be based on the area of a property.

Aerial Photos

You may remember about a year or so ago a weird plane was seen flying up and down the island. That plane was taking detailed photographs of every building on the island. The snaps will be used to map out a building’s area in square metres, which is what the new rates system will be based on. 

Why the Delay?

Tynwald backed the report in October 2019, but then it all went a bit quiet, largely because rates reform wasn’t a major priority during a pandemic. 

But Mr Harmer, after questions from his predecessor, Douglas South MHK Chris Thomas, said: ‘The aerial photography was undertaken by the supplier and the images have been handed over to the Department of Infrastructure.

‘However, in advance of incurring further costs and beginning the drafting of primary legislation to enact the plan, a further consultation will be issued with more detailed example of how a modified area rating method would work compared with capital banding system given that a range of feedback has been received in support of both options.

‘The results of this consultation will then determine the drafting instructions.’

What Happens Next?

What Mr Harmer has not indicated is when this consultation will be done. A target had been made for the reforms to be completed by 2022 or 2023, but with the sun beginning to set on this administration, this delay will inevitably open the door for the next administration or new MHKs to make changes or abandon the project entirely and seek a new way forward.

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