Council rates gouging

About two years ago I came to realisation that Brisbane City Council were using a differential rating system for charging rates. They, and I subsequently found out that many other Qld councils, charge higher rates to non-owner occupiers. I raised this with them and their reply was astounding. Myself and Margaret Lomas put up a bit of a campaign to raise awareness among investors that the practice is extremely unethical at best and although it got a bit of traction, unfortunately it still occurs.

It's timely with an election coming up that I believe anyone who has bought a property in Queensland in the last couple of years is also made aware of the practice as the basis for it is completely unjust and it's almost guaranteed that the majority of investors aren't even aware it's happening! Particularly surrounding the debate around negative gearing, I wonder how they will justify their reasoning next time around if it's indeed abolished.

I'd personally love to see more awareness raised and many people writing to their respective councils about this to once again ramp up the pressure.

To read the articles giving more detail about the issue, how it was raised and Brisbane City's "reason", click here
To see a complete list of councils participating in the gouge, click here.

Any and all discussion invited of course!

- Andrew

 

I'm suprised more Councils haven't done it, given their grants/subsidies from state/fed governments are not keeping pace with their expenses. Given a significant number of IP owners are not electors in the Council area, there's also limited backlash at the ballot box.

I've got some sympathy for those who bought in before the rates changes, but anyone buying in now should be aware of the rates situation and make their investment decisions accordingly.

 

I agree with the practice if it was for international investors but to do this to the local investors I think is abit harsh.

 

Yes, well aware of this, and yes it is a rort. But it is just another example of a taxation system that takes progressively more from you the more you earn. Why do the government take 45% of earnings over 180k? Why do I have to start paying land tax when I own a certain amount? Why is stamp duty a percentage of purchase price rather than just a flat rate?

They are all bloody frustrating, and impediments to growing wealth but as long as governments prefer to increase taxes rather than cut expenditure we are stuck with it. If they can get away with it they will.

 

This is Queensland, the home of two tier marketing.

There's no reason why local council can't get in on the act.

 

I thought I read this was made illegal last year?

 

Yes something. My vague memory is a group were going to bring action against a council and then the state govt moved to make it clearly legal.

 

They won their case, but Qld Government legislated so that the practice could continue and councils weren't liable for paying back the money unlawfully collected. Was interested at the time because I might've scored a hefty refund from council, but knew the state government wouldn't let it stand.

http://www.governmentnews.com.au/20...ils-demand-legislative-cover-rates-litigants/

 

Currently rates are tax deductable(pre election) so in theory investors pay less than OO due to these current conditions.

Not sure if that still makes it justifiable though..

The Queensland councils charging higher rates for investors

 

I was close. I'm not completely senile yet.

 

Take away the extra for investors, and Bris council rates and water charges are a rip anyway, people say NSW regionals are expensive, well Bris and surrounds beats them all hands down.

Redlands and Moreton bay are even more than BCC.

I was trying to work how how they can charge so much for water when they are often awash in it.

 

It still doesn't work because everyone is on different tax rates. That means that depending on your marginal rate, if two different investors were to own the same property they would be paying different rates for the same service. As I mentioned at the time though, should anyone with an allowable deduction for an item or service in their profession then be expected to pay more at market for the same service or product as the person sitting next to them who isn't allowed a deduction? I think it's just a smoke and mirrors excuse by council to convince themselves it's ok.

@D.T. Yes it was and as was mentioned they just changed the legislation! Disgraceful.

 

Ah ok, thanks for clarifying

Average here is about 1200 pa I'd say

 

It is plain and simply the same mentality a lot have, they assume all investors have too much money, so try and ride what they think is the gravy train while taking zero of the risk or doing anything extra, if they offered something extra, that would be different.

You can see the way many peoples minds work, what they would really like to do, is take any and all gains made by property to be shared with everyone, communist really, they ignore the very real risks and they totally miss that there has to be incentive either to invest or work.

 

That is about what you pay in many cheaper parts of Sydney 1200-1500, western regional in small towns about 1600-2000, parts of Bris are over 3k !

 

I've noticed the same thing. By far the most I pay in council rates is in SE Queensland.

 

There are lots of rentals close to our suburb. Tenants leave, put all their crap on the footpath and go. Owner decries all knowledge. Junk outside large townhouse complexes sometimes extend for more than 20 metres.

Council stuck with clean up costs. Can't say I blame them for charging extra.
Marg

 

That happens in many places in/around Bankstown too, but they do not come at this, frankly, many councils waste money and are getting far more income in places where this happens anyway, so that breaks that as a good reason, besides, the person who did the dumping or owns the rubbish is always to blame, not somehow shifted to a landlord -- plenty of owners do this too.

 

Can I add that in Qld, stamp duty for the purchase of an IP is double the rate charged to an OO. FHBs get it for free up to a certain value (which I have no problem with).

 

Bump. A couple years on from the last mention, however still unsure of what the final answer is on this? Did Lomas get anywhere with this?

I’ve just received a letter with the Gold Coast council suspecting I have recently rented the property out, which I have. Im being asked to clarify if it’s an IP, I presume for charging me higher (can’t find any info on how much)

Im I’m considering not replying and dragging it as long as I can.