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Domestic rate proposals will put more pressure on NI farm families

UFU Deputy President John McLenaghan, on his farm near Garvagh. Picture: Cliff Donaldson

The Ulster Farmers’ Union has warned that proposed changes to the domestic rating system in Northern Ireland will place further financial pressure on farm families at a time of mounting challenges for the sector.

In November 2023, the Department of Finance (DoF) consulted on seven rates proposals, four in the non-domestic sector and three in the domestic sector. Following a supplementary consultation in early 2025, the UFU voiced strong opposition to two key proposals:

  • Increasing the Maximum Capital Value (MCV) cap on domestic properties from £400,000 to £485,000
  • Cutting the early payment discount from 4% to 2%.

UFU deputy president John McLenaghan said, “Our farm families are already under severe strain with the proposed changes to inheritance tax, input costs and ongoing market volatility. These latest proposals from the DoF are another blow and will put even more financial pressure on our industry. Increasing the rates cap will unfairly penalise farm households, especially those who have invested in building or improving their homes through their own labour. This often includes additional outhouses which increases the value of the property and are separate to the farm business.

“We’ve submitted our response to the consultation and have made our position very clear. The MCV cap should remain at £400,000, no changes whatsoever should be implemented, and the full 4% early payment discount to be maintained. Many farmers pay their rates early to avail of this discount and should it be reduced to 2%, our farmers will be left with another financial burden to manage. It might seem like a small reduction, but it makes a huge financial difference for farm families.”

According to the June 2024 DAERA census, there are over 26,000 farms across NI, many of which include homes that exceed the proposed cap due to scale, design or additional outbuildings, features that are common in rural settings. UFU research also shows that the majority of new farmhouses built in the last decade are valued over £485,000, meaning that a large percentage of these many not be able to avail of any rates relief and their rates bill will significantly increase.

At the launch of the consultation, the DoF Minister claimed that only 1% of domestic properties in NI would be affected by the MCV increase. But, UFU data shows that a significant number of farmhouses will fall within this bracket leaving many worse off financially.

It must also be taken in consideration that rural dwellers do not have the same benefits as those living in urban locations. This includes access to a town’s sewage system and street lightening which is included in rates.

“Our farm family structure in NI is already in an extremely vulnerable position due to Labour’s proposed inheritance tax changes, farmers have no idea how things are going to pan out. To now have the domestic rate proposals looming over them too, is going to severely impact their mental health and wellbeing.

“Local charity Rural Support, offer support to NI farmers and they are in the process of recruiting more mental health counsellors to meet the increasing demand for their services. In six years, the number of counsellors at Rural Support has increased from just two to more than 20.

“Government need to wake up and realise they are pushing farm families to the brink. Not just financially, but emotionally. We need policies that support rural families, not penalise them. They’re failing to deliver what is needed.”