Debate contribution: Business Growth Accelerator and Vacant Rating Reform

Debate contribution by Mr John O'Dowd on 29 June 2026.

MLA

Mr John O'Dowd

Party at the time

Sinn Féin

Date

29 June 2026

Type

Debate contribution (made as a minister)

Business

Ministerial Statements

Heading

Business Growth Accelerator and Vacant Rating Reform

Assembly identifier

Official Report component 5644669

Read the official Assembly record

Text

I wish to make a statement to the Assembly setting out the next steps in my ambition to reform rating policy and bring about a more progressive, transparent and fair taxation system. I have been consistent in my support for local businesses and have publicly recognised their contribution to the local economy. Equally, I have listened to the concerns raised around sustainability, growth and how challenging the operating environment has become. That is why I am announcing a public consultation on two significant proposals designed to support business growth while addressing longer-term issues in the rating system: first, the introduction of a business growth accelerator and, secondly, changes to non-domestic vacant rating.

I want the rating system to support rather than constrain development, improvement and investment. The proposal to introduce a business growth accelerator would see temporary targeted relief offered to businesses that are taking tangible steps to expand their operations. That support is designed to reduce the upfront financial pressure on businesses investing in their property; allow businesses to recoup investment costs; and encourage development that might otherwise not proceed. The business growth accelerator would give businesses a specified grace period after making improvements. During that time, they would continue to pay rates based on the property's value before the improvements, delaying an immediate increase. That will help to create better conditions for construction activity, business expansion and wider economic regeneration. Alongside the business growth accelerator, I want to examine how non-domestic vacant rating operates and how increases in liability levels can be best implemented. At present, vacant properties are liable for up to 50% of occupied rates. The consultation proposes increasing that liability on a staged basis to 75% and then 100% to encourage the use of vacant space. We will seek views on introducing a phased approach to increases in vacant rating liability rather than a single-step change. I outlined my intent to take that approach in my statement on 18 November, alongside the fact that reform of rating policy should support growth, make better use of property and ensure that the system is fair, proportionate and aligned with wider economic objectives. The current 50% rate, which is lower than that which applies in other jurisdictions, is perceived as reducing incentives to bring properties back into use. The proposed change aims to encourage occupation; reduce long-term vacancy; align more closely with other jurisdictions; and increase revenue up to an estimated £20 million annually. The case for change is grounded in the need to strike the right balance between encouraging productive occupation, tackling long-term vacancy and avoiding unintended consequences for businesses and property owners. I am particularly keen to hear from those impacted by vacant commercial units and especially about how any phased increase can be implemented in a sustainable way that is fair, proportionate and sustainable within the tax system. The proposals on the business growth accelerator and changes to non-domestic vacant rating are, in my view, an important step forward, especially as they underpin my previously stated commitments, removing disincentives to expansion by ensuring that businesses that invest in their physical footprint are not unfairly penalised by immediate increases in rates and unlocking future tax-base growth. By supporting businesses to grow today, we are expanding the economy, which, in turn, will secure long-term, sustainable revenue for our public services. They will also complement existing support. The accelerator will operate alongside our highly successful Back in Business scheme, which has helped to bring over 100 vacant high street properties back into use since May 2024. Those issues have been the subject of considerable interest and comment in the Assembly, and it is right that we grasp the nettle now. Consideration of those matters sits alongside other important strands of rating reform on which I will continue to update the Assembly. I turn now to the strategic review of rates supports. It might be helpful to remind Members of the progress to date. As set out in my statement to the Assembly in November, I intend to look across the existing support landscape and consider how it can better reflect and positively respond to present-day economic conditions and policy priorities. This announcement represents the next step in that. That said, I also put on record my intention to strengthen support for small businesses. In that vein, £10 million has been set aside in the draft Budget to broaden the impact of the small business rate relief scheme in order to increase the number of businesses that can benefit from it. I also remind Members that the review process has assessed four measures: the early payment discount; the maximum cap; small business rate relief; and the non-domestic vacant rating policy. Recommendations for Executive consideration, following full public consultation, have already been made in relation to the maximum cap, the early payment discount and small business rate relief, with the latter included as a costed intervention in my Budget proposals. As I said, non-domestic vacant rating is due to be consulted on in the coming weeks alongside the business growth accelerator proposals. I indicated to the Assembly in November that the review process would be expedited, with the target for completion the end of the 2027-28 rating year. Looking ahead, there is a clear case for examining the rating of empty homes, and that will be my next priority. Considering the rating of empty homes provides an opportunity to understand and assess two related issues that are often raised in the same context, namely, second homes and holiday homes. Importantly, given the link to the Executive's housing strategy, taking forward our own review during this financial year will permit better alignment with that important programme of work. Alongside those significant policy reviews, in line with my commitment to expedite the process, I have asked my officials to continue to work at pace to scope the remaining rate reliefs. That would allow for the implications, sequencing and resource requirements of any further review work to be assessed, including an assessment of the willingness of others to make decisions about reform and an equitable rating system before decisions are taken on how best to proceed. In closing, I reiterate how important it is to me, as Minister of Finance, that our businesses are supported to thrive. I want to see additional support directed at those businesses, which provide vital employment, supporting workers, families and communities. The measures that I have set out reflect my ambition to enable business expansion, tackle vacant properties and help to revitalise towns and high streets while unlocking future growth in rates revenue for local and central government. My focus is clear: to support our public services, strengthen our local businesses, back workers and families and grow our economy for the benefit of everyone.

On that point, Mr O'Toole, I share your frustration. There is an obligation on all parties in the Executive to be minded to enhance support for businesses, to look at how we can have a modern, fair and equitable rating system and to move beyond responding to or being behind the last lobby to walk through your office door. We need a better way of doing things. I have set out in the statement measures that, I believe, will support small businesses, enhance business activity, sustain and grow employment and grow our economy. It is up to others whether they are prepared to back that. If there is no further movement at the conclusion of this consultation process, I will take a decision on whether it is worth our time to move ahead with any of the rates reforms if there are those at the Executive table who are not prepared to take the necessary decisions.

As I mentioned, we have a successful Back in Business scheme supporting businesses that are moving into properties that have been vacant for over 12 months. I visited a number of those, and the ingenuity of people in bringing businesses and life back into vacant properties is remarkable. We have a small business rate relief scheme, which provides a huge boost to businesses, giving them up to 50% rates relief. Therefore, a number of successful measures are in place, and I want to see them increasing. In recognition of the pressures, challenges and opportunities that exist for our businesses, there is a duty on us in this place to offer what support we can in a fair and equitable way.

As I set out in response to the previous question, we have in place the vacant property rate relief scheme and the small business rate relief scheme, which are very successful. I set aside £10 million in the draft Budget for small business rate relief to be invested. Today's proposals could raise up to £20 million for councils and the Executive. We will see what happens as the consultation on increasing the tax liability for vacant properties goes on. Some in the sector argue that they cannot afford to bring such properties back into use. Could we use the money raised as a grant to those businesses to facilitate their bringing properties back into use through physical improvements etc? That is a worthy debate to have. However, to do any of those things, you have to make decisions. That is what politics is about: making decisions.

I have to be mindful of and await the outcome of an ongoing court case. There is engagement with the sector at official level, and I await a report from the sector on how it believes that rate reviews should proceed and what that would look like, which I look forward to seeing.

My officials have been engaging on how the Agriculture Minister's Bill impacts on the work that we are trying to do: there is common cause in that. We need legislative and fiscal intervention to bring, in many instances, our town centres and villages back to life. The proposals that I have put forward today complement what the Agriculture Minister is trying to do.

It has been very useful in encouraging new businesses in particular. Giving them that rate relief allows them to invest the moneys saved in their property and business. It does not help only those businesses, however. Reopening a vacant property brings footfall to that part of the street. Businesses either side of such properties have commented to me on my visits that they welcome businesses opening in those properties, because that means more people coming into the town or village. If they drop into such a business, they might drop into the business next door. It is all about increasing footfall on the high street and in our villages.

1,773 words. Text as published by the Northern Ireland Assembly.

Assessment

Not qualifying

Jev’s structured answers

Assessed 21 October 2026 at 15:58 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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