If you’re renting your house in the Southern Downs, expect your rent to go up by $50 a week. That’s the advice of Warwick real estate agent, Helen Harm, who is furious with the new Residential-Non-Principal Place of Residence rates category that was passed in the SDRC budget last week.
The SDRC, who has faced a tsunami of cost blowouts, cost shifting from other levels of government, and cuts to various support programs, have been forced to find new revenue streams in this year’s budget. The decision to introduce a new rate category on rentals may be the most unpopular. The new rating category captures higher rates for ordinary rental homes.
During the special meeting of council last week, in which the budget was passed by a narrow margin, Cr Joel Richters, attempted to pause the decision or cap the first-year increase for the new Residential-Non-principal Place of Residence category at 7.5 percent. Both motions failed.
Cr Bartley also expressed concerns, saying that it might increase the population of tent cities in the area. “If you’re a landlord, you’ll just pass that on. Landlords are fairly removed and it’s normally placed in the hands of a real estate agent to deal with it and they’ve got to get a return for that landlord.”
Ms Harm concurs that will happen and that, in fact, she has already advised landlords.
“On the heels of a federal budget that’s looked at capital gains, I think we’ll be running very short of rental properties and that’s going to be a big problem for this community,” Cr Bartley said.
Ms Harm agreed that some landlords might forgo renting their properties and either sell up or put a family member in the home.
Helen Harm also thinks the new rate category is discriminatory as it taxes a chunk of the population who don’t live in the region and don’t vote. Many of the owners, she says, have worked hard to purchase a second property and view it as a retirement income or a legacy to pass to their children.
“[Landlords] are going to have to pass it on. They’ll have to,” she says. “Here’s a prediction: we’re going to have more people living under bridges in under a year.”
Cr Morwenna Harslett, in chambers, said that council cannot be the “moral gatekeeper” of landlords. If they pass on the costs, then “that is a shame”.
“I would hope that the people out there with money and multiple properties would be better than that but I can’t control that. So, overall, I believe this is a reasonable measure that asks those who have more to contribute a little bit more to our communities.”
With the raised revenue, Cr Harslett said, council could address “more affordable housing or increases in roads expenditure”.
Introducing a new rate category is a fairly permanent solution and future councils, when rates rise, will raise the rates in that category as well.
While some councils have introduced a similar rate rise for properties that are holiday and short term rentals, this rate category just taxes the whole sector, which Ms Harm thinks was the “easy route”.
In chambers, Cr Russell Wantling pointed out that according to the 2021 ABS census, about 22 percent of households in the region rent their home, which translates to about 3,500 households.
Mayor Melissa Hamilton reminded her colleagues that investment properties are fundamentally a business and that landlords already pay lower rates than owner occupiers “because their rates are tax deductible”. She pointed out that the rate increase is “inconsequential” compared to insurance and other costs.
Cr Sarah Deane called the budget “challenging” thanks to the increased operational costs that council has no control over.
