The Secretary of State for the North has announced an increase of 19 per cent on domestic rates next year in a bid to raise an extra £20 million in funds for public services for each of the next two years.
Rates will also increase by 6 per cent in the year 2007-08 as the British government also introduces water charges in the six counties.
Peter Hain, who announced budget plans for 2006 to 2008 at Belfast's Science Park, said the North needed to bridge the gap between what ratepayers in the province pay compared to council tax bills in England if funds were to be released.
"Income from domestic rates in Northern Ireland is only half the equivalent figure in Great Britain," he said.
"Therefore I propose to increase the domestic regional rate next year by 19 per cent . "This will represent an increase of around £1 per week in the average domestic rates bill but . . . will raise an additional £20 million in each of the next two years.
"This will help meet the costs of the new priority funding packages for children and young people, science and skills and the environment and energy, he said.
"While this is a large percentage increase, the amount householders contribute to local public services here will still be much less than 60 per cent of the average for England.
"That gap will need to be revisited in the future if we want to maintain local public services at the same level as elsewhere," Mr Hain said.
The British government has earmarked £16 billion for total public spending by 2008.
Mr Hain said £45 million would be spent next year and £55 million the following year on new ring-fenced investment in three priority areas.