Hi,
Don't know if this is the right place to post this in this forum, but nonetheless..
I have an IP in Cairns and have just received my Council rates notice. It appears to be 2.3% of the worth of the IP. Now… if my PPOR council rates were on the same basis, I'd be paying well over $11K (!!!) a year.
Is this right? Am I missing something? It just seems grossly excessive for a unit (!) worth roughly a fifth of my PPOR, yet the IP council rates are double the amount.
Read the documents which came with your rates notice.
I have. All of them. They still haven't indicated on what basis (and why) they've calculated the rates the way that they have.
Absolutely appalling!
Have they increased significantly since last year or just a gradual increase?
I would imagine this is having a large impact on your bottom line.
I've recently purchased the property, but there are horror stories online about how much they've risen since 2008 – double digit increases, percentage-wise.
It's a shock to the system, especially when I'm used to paying half the cost for my own PPOR and it's worth so much more than the IP. The only positive is I can claim it come tax time, but it seriously casts a doubt over the efficiency and effectiveness of council up there, how they spend their money, and how they've based their rates.
As a percentage of the property's value, it's through the roof!
OK few things to say about this.
Firstly, everyone's rates probably went up at least 10% in the last 12 months. My council put a sentence on the rates notice, explaining that the bulk of the rise was in the garbage removal charge, which is thanks to the cost of them taking your garbage to the tip, which is thanks to the Carbon Tax.
Secondly, I am guessing that councils in QLD are still trying to recover their towns from the damage done in the last floods. I presume some of these damage repair bills will be paid for via council rates hikes.
Thirdly, the amount you are charged for the council rates is related to what council declares the value of your site to be. Have you taken a look at the valuation amounts on the rates notice, and if so, are they less than what the property would sell for if you sold it? Normally the council "valuation" is less than what you could actually sell your property for in reality.
If they have suddenly decided to "value" your property at more than it is worth, you might want to do something about it. Did you know that you can challenge the valuation on your rates notice? Contact council and ask how.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks JacM. I'll be ringing the council soon to find out how they decided to value the majority of the base rate. There's nothing on the notice to indicate what value they've put on the property and consequently nothing for me to use to find out how they figured out the final cost. The other costs were in the docs they sent out with the rates (I can live with those).
Your council, however, seems to be kinder than this one, at least partially explaining why they've raised their costs. The document I received in addition to the rates notice only mentions the costs, but not why they are what they are.
Stay tuned…
Weird. I'm in VIC and on all VIC rates notices, it shows an "unimproved value" which means what the deem your land to be worth if there was nothing on it except the dirt. Then it also shows an "improved value" which is what they deem it to be worth with the dwelling on it.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
JacM wrote:Weird. I'm in VIC and on all VIC rates notices, it shows an "unimproved value" which means what the deem your land to be worth if there was nothing on it except the dirt. Then it also shows an "improved value" which is what they deem it to be worth with the dwelling on it.It's funny how way off they can be on the "unimproved value" figure. If i knock down the house and sell the land there is no way i would get what they are suggesting it is worth.
Yes exactly. I find the unimproved value a bit high, and the improved value a bit low. Oh well whatever! I figure council rates on a 3 bedroom house is going to clock in at $800 per annum at a minimum. Quibbling over valuation differences of $10k probably wouldn't change the council rates payable by much. But if they valued my property at double reality, then I'd be doing something about it for sure.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
They probably need the money, The Cairns economy has been in trouble for some time. The best proof of this is that marketing companies can earn as much as $50,000 for putting someone into a house and land package in Cairns compared to around $30,000 for a house a land package in a major city. Now developers only pay large commissions if they cannot sell the product.
Nigel Kibel | Property Know How
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In Townsville the rates notices state a unimproved land value, but no improved value. I find the unimproved land value to be quite accurate.
For a 3 bed house you're looking at about $2900 per year, this includes a water allocation of x amount KL. you won't be charged any more for water unless you exceed the allocation.
Totally agree Nigel, Cairns is really struggling at the moment, and it all seems to be kept on the down low. The local economy is very tourism reliant so the high Aussie dollar would be having a significant impact on tourism dollars.
Rick sta wrote:In Townsville the rates notices state a unimproved land value, but no improved value. I find the unimproved land value to be quite accurate.For a 3 bed house you're looking at about $2900 per year, this includes a water allocation of x amount KL. you won't be charged any more for water unless you exceed the allocation.
Are you serious? Wow. In an equivalent type of property in VIC, council rates are $900 a year. Water is billed separately by the relevant water authority, but water usage is perhaps $40 per quarter. The privelege of being connected to the water and sewage system is about another $175 per quarter. Even if this were all billed together, it still does not clock in at $2k per year.
You guys should move to VIC !
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Everything you need to know here including rate categories and costs
http://www.cairns.qld.gov.au/__data/assets/pdf_file/0009/57528/23july12_special_budget_cl12.pdf
$2900 does seem high. Bowen, Qld. 3 bed house is about $1800 per year.
I rang Council today. It is what it is.
The majority of the costs are services-related, although it still doesn't excuse how much, costs-wise, they're actually charging. Efficiency might be their biggest problem and how they're using their money. The fact that they're struggling as a result of other factors (e.g. tourism) should not, in my opinion, affect what property owners pay for their rates.
This reminds me of a movie scene – "You want $5 for a $1.99 hot dog and you're wondering why the Democrats are in trouble".
Not to rub salt into the wound, but it's been said for some time that investing in the tourism sector is dangerous. Perhaps don't buy another one in the area!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Population density is the determining factor. Cairns is small so cost effectiveness is nothing like bigger towns and cities.
EG: Pop density
Cairns 250.9/km²
Newcastle 1103/km²
Melbourne 1567/km²
Yes, i reckon local Councils are totally out of control with their spending, in NSW as well. Interesting that people from Vict reckon their Councils are OK, and that was the state that merged/consolidated Councils to achieve economies of scale, as mentioned above.
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