High-rise apartment owners are facing huge rate hikes with those above the 40th floor facing an increase of up to 50 per cent in one city – and there are fears it could be picked up by others.
The move for apartment owners on the Gold Coast to increase prices depending on which floor a unit is on has been slammed by critics and dubbed a “view tax”.
The council believes the change “ensures unit owners are charged fairly” as the floor level can affect a property's value.
The change was passed by the city council on June 7 and went into effect on July 1, but the first notices only went out to residents last week, causing an uproar among the community.
Information sent out with their tax bill explained the new method and what it would cost them.
Those living below the fifth floor will see no change, while residents living between the fifth and tenth floors will face an increase of up to 20 percent and residents between the 11th and 20th floors will see a bill up to 30 percent higher.
Homeowners with homes between the 21st and 40th floors face increases of up to 40 percent and those above the 40th floor could be kicked up to 50 percent more.
A City of Gold Coast spokeswoman told news.com.au the new method was used to calculate general rates for high-rise units that are a principal residential location and was done so “to ensure fairness and equity across all ratepayer categories”.
“The general rate for high-rise units will vary depending on the unit's rate categorization that takes into account [consideration] unit size and floor level,” the spokeswoman said.
“This change ensures unit owners are charged fairly based on the effect unit size and floor level have on a property's value.
“The previous method did not take these factors into account. For example, under the previous method, a first-floor high-rise might have paid the same general rates as a 40th-floor penthouse.”
She said the change would also bring prices in line with the methodology used for other units that are permanent or short-term rentals.
Strata Community Association Queensland general manager Laura Bos said the change to how general rates are calculated for high rises in the Gold Coast had been “horribly handled” with apartment owners feeling “blindsided”.
She said the major problem SCAQ had with the “viewing tax” was the type of valuation underpinning the high-rise apartments.
“Homeowners are valued by their land value while condo owners are valued by their property value. 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 a problematic assumption was made that people living in these high-end apartments have more money available.
“Assumptions have been made about the wealth of people who live in apartments, who are facing the same mortgage hikes, wage stagnation and cost-of-living problems as everyone else,” Bos said.
“Some are also pensioners. It would have been a much better idea to gradually introduce the new change over a period of time so that people could at least prepare.”
SCAQ is concerned that more councils will consider adopting the “display tax”.
“We are concerned that this will become more widespread as councils grapple with increased costs and little support from state and federal agencies, which is understood and acknowledged,” Bos said.
“But we call on the municipalities to do better and to make sure that the calculations are really fair, where everyone pays prices on the same basis and that the increases are staggered.”
A condo owner who lives on Chevron Island said Gold Coast Bulletin he was stunned that his bill had risen 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 handed down last month.
Greg Van Dam said he was concerned about young people who were already struggling.
“We're fine. We don't have a mortgage. But you have a lot of young people who bought into high-rises with mortgages because they couldn't afford a house – this is just another kick in the gut,” he told the paper.
On June 7, when council adopted the change, Gold Coast Mayor Tom Tate had boasted of keeping the 2024-25 annual increase below the annual consumer price index (CPI).
“Like the Family Budget, council costs across the board have also increased significantly. We need to ensure we deliver the first-class services and infrastructure the city needs, but at a price taxpayers can afford,” Tate said in a statement at the time.
“Since 2012, every annual rate rise (capital city) has been at, or below, CPI and this year we have delivered a rate rise of 4.24 per cent, below the annual CPI of 4.8 per cent).”
A spokeswoman clarified Monday that this 4.24 percent increase only applied to properties that are a primary residence on the lowest general rate or with an average assessed value below the city's median.
“71.58 percent of prime residential properties saw 4.24 percent net price and fee increases or less,” she said.
