High-rise apartment owners are being hit by huge rate hikes, with those above the 40th floor facing up to a 50 per cent rise in one city – and there are fears others could take over.
A move for Gold Coast apartment owners to increase rates depending on what floor the unit is on has been slammed by critics as a “view tax”.
The council believes the change “ensures unit owners are charged fairly” as floor level can affect property value.
The change was passed by the council on June 7 and went into effect on July 1, but the first notice of the rate did not go to residents until last week, causing an uproar among the community.
The information sent with their rate bill explained the new method and what it would cost them.
Those living below the 5th floor will see no change, while residents between the 5th and 10th floors will face an increase of up to 20 percent and those between the 11th and 20th floors will face up to a 30 percent higher bill.
Homeowners with residences between the 21st and 40th floors are seeing increases of up to 40 percent, and those above the 40th floor could be hit with up to 50 percent more.
A spokeswoman for the City of Gold Coast told news.com.au the new method was used to calculate general rates for high-rise units that are the main place of residence, and was done so “to ensure fairness and equity across all categories of ratepayers”.
“The general rate for high-rise units will vary depending on the categorization of units under consideration [consideration] unit size and floor level,” the spokeswoman said.
“This change ensures that unit owners are fairly charged based on the effect of unit size and floor level on property value.
“The previous method did not take these factors into account. For example, under the previous method, a principal residence unit on the 1st floor could pay the same general rates as a penthouse on the 40th floor.'
She said the change will also bring rates in line with the method used for other units that are permanent or short-term rentals.
Strata Community Association Queensland chief executive Laura Bos said the change to the way the Gold Coast general rates were calculated for high rises had been “horribly handled”, leaving apartment owners feeling “blindsided”.
She said the big problem SCAQ had with the “view tax” was the type of valuation that underpinned the high-rise rates.
“Homeowners are rated on the value of the lot, while condo owners are rated on the value of the property. The two are very different,” she told news.com.au.
“Why not have the same rate base for everyone if we're really talking about parity and fairness?”
She also said there was a problematic assumption that people living in these high-end apartments had more cash on hand.
“Assumptions have been made about the wealth of apartment dwellers, who are facing the same rising mortgages, stagnant wages and cost-of-living issues as everyone else,” Bos said.
“Some are also pensioners. It would be much better to introduce the new change gradually over a period of time so that people can at least prepare.”
SCAQ fears more councils will consider adopting a 'view tax'.
“We are concerned that this will expand as councils face increased costs and little support from the state and federal government, which is something that is understood and acknowledged,” Ms Bos said.
“However, we are calling on councils to improve and ensure that the calculations are truly fair, where everyone pays rates on the same basis and that the increase is spread.”
A condo owner who lives on Chevron Island said so Gold Coast Bulletin he was stunned, his bill went up by 20 per cent and criticized the council for not being more transparent about the change – given Gold Coast Mayor Tom Tate had announced a 4.24 per cent rate rise when the budget was released last month.
Greg Van Dam said he worries about young people who are already in trouble.
“We are okay.” We don't have a mortgage. But you have a lot of young people who bought high-rises with mortgages because they couldn't afford a house — that's just another kick in the guts,” he told the publication.
On June 7, when council accepted the change, Gold Coast Mayor Tom Tate boasted he would keep annual rate increases in 2024-25 below the annual Consumer Price Index (CPI).
“Just like the family budget, the total costs of the Council have also increased significantly. We need to ensure we deliver the first-class services and infrastructure the city needs, but at a price ratepayers can afford,” Mr Tate said in a statement at the time.
“Since 2012, every annual (principal residence) rate increase has been at or below CPI, and this year we've had a rate increase of 4.24 percent, below the annual CPI of 4.8 percent.
A spokeswoman clarified Monday that the 4.24 percent increase only applies to properties that are a primary residence with a minimum general rate or an average taxable valuation below the city median.
“71.58 per cent of prime residential properties received 4.24 per cent net rate and charge increases or less,” she said.
