Gold Coast Council Rates rise again – Owners not happy.

Owners have expressed their disgust as Gold Coast Council rates rise yet again. Many are justifiably concerned that the continuing rate increases may force them out of their homes.

A council employee stated that owners should expect increases in their rates every six months with the clear implication that the increases were just a matter of course that everyone should just accept.
The latest rate notice includes a City Transport charge of $58.50. However, many owners are questioning exactly what benefits there are for them with the Transport charge.

Patricia of Mudgeeraba sent me an email after receiving the latest notice. She states "The City Transport charge is supposed to be for "improvements" to the transport system on the Gold Coast but bus services in Mudgeeraba have actually decreased and there certainly has not been any improvement. The light rail system might be of some benefit to those who live around the Surfers Paradise area but it is no use to those who will never use it."

Patricia went on to say "It also seems unfair that only rate payers have to pay for the so called improved transport. What about people who live on the Gold Coast who don't own property? They still use the light rail but they don't contribute anything".

Patricia is not alone in her concern about the Rate increase. Another owner in Palm Beach quoted his costs. "I pay $1250.00 approx. in council rates and when you add Body Corporate Levies and Water rates to the costs, it is getting to the stage where I would be better of being a renter rather than owning my property".

Better off renting than owning?? Well, you only need to do some basic arithmetic to work out that this is true in many cases. Surely the Gold Coast City Council does not want to encourage that scenario for owners.

There is no doubt that these are genuine concerns. Water Rates will soon be issued quarterly and the cynics amongst us are expecting continuing subtle increases that will supposedly have less impact than if the bills were issued half yearly.

Mayor Tom Tate has repeatedly said that the increases are small and they are seen as a contribution to improving services but he does not appear to understand that many owners cannot continue to absorb Council Rate increases. The fact is that many owners are considering leaving the Gold Coast altogether because of the constant increases.

Mayor Tate needs to consider that when taken on a cumulative basis, the increases are not small at all. In some cases, Gold Coast Council Rates have doubled in the last ten years.

Investors are also finding things tough. Rents do not cover the increases and, in some cases, rents have actually dropped because of the over supply of rental properties on the Gold Coast.

Like most Bureaucratic organisations, there is no doubt that the Gold Coast City Council could be a lot leaner but I wonder if Mayor Tate is making any attempts at all to cut costs and actually reduce Council and Water Rates.

Recent reports indicate that the current Council would be voted out if an election was held now. Well, one way that they could improve their position would be to make a committed attempt to reduce the costs of owning property on the Gold Coast.

What can you do about Gold Coast Council Rates rises?

If you live in a Body Corporate Community, I would encourage you to contact your Committee and urge them to write to the Gold Coast City Council on behalf of the Body Corporate requesting the Council to focus on reducing costs and Council and Water Rates.
If you are concerned about Gold Coast Council Rate rises send me an email.

Footnote:

I sent the following questions to the Gold Coast City Council for their comment but have yet to receive a response.

1. Why specifically, have the current Council Rates increased?
2. A Gold Coast Council employee advised that it was likely that there would be rises every six months. Is this correct?
3. Is there any possibility that Council Rates might decrease in the next six months?
4. Is the Mayor and Council aware that many owners of Units on the Gold Coast are being forced to consider leaving their homes because of rising Body Corporate fees and Council and Water Rates?
5. Is the Mayor and Council aware that investors are finding that rents are not sufficient to cover the increases in Council Rates and Body Corporate fees?

If the Gold Coast City Council does respond to any of the questions, I will publish their answers here.

Body Corporate owners angry at Gold Coast Council Rate increase

Unit Owners are up in arms about the recent Gold Coast Council Rate increase that puts many under financial pressure and ultimately contributes to lowering the value of their properties.

In recent years, there has been a steady increase in Gold Coast Council and Water Rates. The increases have coincidentally accompanied the decline in the value of homes in Body Corporate communities on the Gold Coast.

The situation was worsened when the Gold Coast Council Rates and Water Rates were separated and Allconnex was set up in 2010 specifically to handle water. This separation was a recipe for increases and property owners were shocked at the gradual increases in their water rates and Council Rates.

The bottom line for owners is that the value of their investments has declined and the decrease in value must surely have been affected by the Gold Coast Council Rate increase.

I took a sample of Council Rates and Water Rates from five properties and each one had significant increases in rates.

Some owners are now facing the frightening prospect of not being able to afford to live in their homes if the increases continue.

When you add the Body Corporate Levies to the Rates, the amount that Unit owners are paying just to live in their homes is getting out of hand.

Of the five properties in the sample, the cost of rates plus Body Corporate levies amounts to between $175.00 and $200.00 per week. Many other owners face much higher Body Corporate levies which push the overall cost up to $300.00 per week.

Many owners moved to Queensland to retire and they purchased units on the Gold Coast to live out their declining years. They understandably had no conception that increases in Rates and Levies could place their retirement dreams at risk.

Ralph, an elderly owner in Broadbeach, said "My combined Council and Water Rates have more than doubled in the ten years since I purchased the property. When I received the latest notices, I wondered how I would be able to find the money to pay them."

Investors are also upset. Owners with portfolios of properties are facing significant increases. Those who rent out their properties would like to be able to pass on some of the increase in costs to their tenants but the market will not bear the increased costs.

Those owners with Units in a Holiday Letting Pool are also affected. One owner of a luxury unit in Palm Beach gave me the beakup of costs versus rent:

• Body Corporate Levies 115.00 per week.
• Council Rates 35.00 per week
• Water Rates 27.00 per week

That makes a total of 177.00 per week. The owner paid 800,000.00 for his property. Average rent in the holiday pool works out at a gross of 450.00 per week over a year.

He pays for Cable TV, Cleaning, Commissions and has the unit fully furnished. He also pays for Electirity. He has ducted air conditioning in the Unit and the tenants often leave the air conditioning on all the time resulting in high electricity bills.

The bottom line is that the owner is coming away with an appalling return on his investment while his unit is deteriorating through wear and tear.

Investors look at the sums and see that they just don't add up. The reality is that investing in Body Corporate Communities on the Gold Coast is not a wise move at the moment.

Gold Coast Mayor Tom Tate wants people to invest in the Gold Coast. Well, if Council and Water rates continue to increase along with other associated expenses, investors will be bailing out and leaving the Coast in droves.

If you are concerned about the Gold Coast Council Rate increase you should contact the Gold Coast City Council preferably in writing.