All Topics / Help Needed! / Brisbane City Council rates rip off

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  • Profile photo of dragundragun
    Participant
    @dragun
    Join Date: 2008
    Post Count: 14

    Hi guys,

    Whilst I’m sure many of you are already aware of this, I recently found out that Brisbane City Council are charging investors more for their rates than they are charging owner occupiers. I wrote a message on their Facebook page, with theirs and my subsequent replies which I’ve posted below:

    Me – Can anyone there please give a plausible reason why rates are charged differently to a property for a non-owner occupier as opposed to an owner occupier? I fail to see how there is a difference in providing the exact same service to the exact same property, other than a way to profiteer off owners who aren’t owner-occupiers at this time

    Brisbane City Council – Hi Andrew, thanks for getting in touch. Council uses a differential rating system based on property land use to levy general rates. This is done to ensure that properties that are the principle place of residence of their owners do not pay as much as those which are income producing. Income producing properties also have the advantage of being able to offset such expenses against taxation. Council’s principal motivation is to ensure, through its differential rating system, that the owner-occupied, single unit dwelling sector of the community contribute to a level that is affordable and value for money. If you require any further information, please Private Message me your contact details and I will organise to have a Rates Officer contact you. Thanks, Tom.
    Like · Reply · May 20 at 3:55pm

    Me – I’m sorry, but that answer is ridiculous and unacceptable. My personal tax situation is nothing to do with council and should not be a factor when applying a rate, particularly when every owner would be in a completely different tax situation. The logic in this is absurd. If you were to apply it to every purchase made in society, everyone would be paying different prices for the same goods and services on everything, as most things are deductible in some way to someone depending on their profession. Should I pay more for sunglasses than the consumer next to me because they’re deductible in my profession? Should my brother pay more for hair cuts because they’re deductible in his?

    All your answer has done is publicly highlight that yes, council has attempted to disguise blatant profiteering from owners using taxation reasoning that is ignorant and illogical. People aren’t that stupid and if council think owners, investors and, more importantly, voters don’t notice, it’s mistaken.

    I have written to Property Observer, Margaret Lomas and other industry professionals who it seems have also taken exception to this and Margaret has started a Facebook aware campaign here Please visit, like and share to raise awareness.

    More importantly, there was a recent ruling on a class action by investors against Mackay council for the exact same thing, which found in favour of the investors. It is my hope that with an awareness campaign and the precedent now set in the Mackay council ruling, that we can get this absurdity overturned in all the other Qld councils who are currently engaging in the same practice. To my knowledge, the other councils currently doing this in addition to Brisbane City, is The Gold Coast Council, Logan Shire Council, Moreton Bay Shire Council and Rockhampton Shire Council. More on that can be found here

    There are probably others but it’s important that investors with properties in any of these areas, and indeed any area, have their say to ensure this kind of thing does not spread. You can also have your say directly on the Brisbane City Council’s Facebook page here

    Thanks for your time.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi dragon

    Yes welcome to the world of investing in SE Qld

    The BCC have been doing this for a number of years.

    I put my rents up a couple of years ago and one of tenants tried to appeal at a RTA tribunal but got nowhere when we produced our Council Rates Notice to justify the increase.

    They can do what they like it us just a matter of pushing it onto the end user.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of JpcashflowJpcashflow
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    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hey guys
    Very interesting what’s the cost difference in rates for ppor vs ip

    Jpcashflow | JP Financial Group
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    Your first port of call in finance :)

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    and the other is their contribution fees for developments which is unbelievable.

    TheFinanceShop | Elite Property Finance
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    Residential and Commercial Brokerage

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Wow.

    This isn’t the only example of unfair rating systems. I’ve seen cases where council rates for a 1 bedroom unit are the same as a 3 bedroom house in the same area. Meanwhile the local water authority will merrily charge the same service charges to a 1 bedroom unit as a 5 bedroom house. Given that in a 5 bedroom house you’re more likely to see 5 times the toilet flushing and 5 times the water draining from the shower than you would in a 1 bedroom unit, you’d think that the service charges would reflect this and charge the 1 bedroom unit a lesser fee. But no.

    It just goes to show the importance of understanding all the holding costs of a property (council rates, water rates, insurance, body corporate) because the bills can quickly turn what looked like a good set of numbers into a paltry set of numbers. It also goes to show one of the reasons why in some areas, certain dwelling types make more sense to purchase than others.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of HPropertyHProperty
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    @hproperty
    Join Date: 2013
    Post Count: 13

    Hi Dragun,

    I have been following the Mackay Investor case in the news and it looks imminent that councils across Qld will be forced to refund as much as $300M to investors due to illegally charging investors higher rates.

    A property I own in Brisbane is rated as “Category 4 – Multi Residential” that is currently tenanted. If was to owner-occupy the property, the rates department would change this to “Category 1 – Multi Residential” which is almost half that of Category 4.

    Not only that, but Queensland Urban Utilities (QUU) are getting in on the overcharging act too, by imposing a “pedestal charge” (ie. a charge for the number of toilets) for any Category 4 rated properties. This QUU charge generally adds about $150/quarter to a normal rates bill.

    It was great to see the Mackay guys win their case in the Supreme Court, but of course, council is appealing the decision so it may be a little while yet before we see any refunds.

    I don’t know if anyone is really aware that the impact extends beyond the council’s budgets. There are flow on effects, like QUU, where they will be forced to drop their ridiculous charges and refund investors too.

    Simon.

    Profile photo of HPropertyHProperty
    Participant
    @hproperty
    Join Date: 2013
    Post Count: 13

    Just an update on the QUU charges. The fees can be found on the QUU website under business rates & charges.

    Basically you get charged a minimum of $110.22 per toilet per quarter, but they are nice enough to give you one for free. So if you are on Brisbane’s “Category 4 – Multi Residential” rates and have 3 toilets, your charged an extra $881.76 in pedestal charges. The same property, if owner occupied, would be on “Category 1 – Multi Residential” rates and would not incur this charge.

    If anyone has any information to the contrary, please let me know.

    • This reply was modified 6 years, 1 month ago by Profile photo of HProperty HProperty. Reason: Link not showing
    Profile photo of dragundragun
    Participant
    @dragun
    Join Date: 2008
    Post Count: 14

    Hi all,

    Thanks for all the input and replies.

    For those it affects or are interested, Margaret Lomas’ lobbying has successfully scored a slot on A Current Affair tonight, Tuesday, 3rd June regarding the issue.

    There are 20 councils in Queensland discovered to be employing this practice so the ongoing case in Mackay and subsequent ramifications affects a lot of investors who have properties all over Qld. Please keep up the support and awareness for this worthy cause and hopefully we can get it changed.

    Cheers,

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