Thomas proposes rates be based on property size

Minister's consultation called a 'sham' by MHK

The Island's policy and reform minister is proposing that domestic rates be calculated on the size of your property, rather than its rental value.

Chris Thomas launched a consultation yesterday on a 'review and modernisation' of the annual charge, which is levied to pay for local services.

Currently, homeowners pay their rates based on the rental value of their property, though an Island-wide valuation hasn't been undertaken since 1969.

This has led to disparity in the system, with properties of different ages and locations costing different sums despite their current value.

Minister Thomas argues this situation is 'out of date and unfair', and says the solution brought forward by his team is 'easier and cheaper' than reassessing property values with surveyors.

In this consultation, he's proposed that rates be based on the 'size in square metres of all the floors in a building', calculated from aerial photographs.

Local Democracy Reporter Ewan Gawne asked Mr Thomas to explain this new assessment method:

In 2015, a separate consultation asked the public if they supported an 'area-based model' for rates assessment, in which 71 per cent of respondents said no.

That year, Tynwald also resolved to spend £2 million on a 'traditional' revaluation using surveyors, though seemingly that commitment has been shelved.

In a tweet Ramsey MHK Lawrie Hooper has called this latest consultation an 'absolute sham'.

He claims Mr Thomas has ignored the will of the public and Tynwald, as he explained to Ewan:

How would this new assessment work?

It's understood aerial photography would be used to make this assessment along with existing government data.

If a property is obscured from view, then surveyors would be sent to the home, with the permission of the owner, to measure it using laser equipment.

A similar valuation exercise of this nature was undertaken of homes in Guernsey, costing the government there roughly £500,000.

Once this information has been captured, a 'square metre value' of the home will be calculated, made using the area of all floors of the building, not just its ground level footprint.

Below is an example of what the captured polygon image of a property may look like:

If extensions are added to homes, it's understood the Planning Authority would notify government if a revaluation was needed.

The Island's 22 local authorities and Manx Utilities set their rate charges which are then multiplied by the rental value of your property.

A calculation under Mr Thomas's new proposal would look like this:

Non-domestic rates, and local authority reform.

The consultation also branches out into the area of commercial rates, to include issues such as 'unequal distribution' amongst local authorities, businesses which operate from residential properties, and charitable use.

The table below offers a comparative view of the rates income of various authorities across the Island.

Reform of local authorities has not been included in the review, though Mr Thomas hinted that should the rates modernisation progress, it may be the next project on his horizon.

You can find the consultation and associated documents here: https://consult.gov.im/cabinet-office/review-modernisation-of-rates/

It's open for next eight weeks, whilst a round-table discussion with local authority members and other stakeholders take place.

The results of the consultation will be published in June, before Tynwald debates the proposals.