property taxes and rates etc

Why your neighbour’s Council rates bill might be $200 less than yours

If you’re renting right now this question should interest you: “Should investors pay more to own a property than a resident owner?” Tenants are directly impacted by this issue because you’re the ones who wear the cost – or at the very least some of the costs, passed on to you in higher rents. So a recent court case regarding city council rates is an issue that affects many of us in Brisbane’s inner-city.

For those not yet up to speed here’s the summary: Brisbane City Council, as with many Queensland councils, charges more rates each year for a rental home than the identical property next door that’s lived in by its owners. Same footpath out the front, same local parks, same rubbish collection, same water and sewerage pipes running down the street. This extra charge has happened for so long we’ve all grown to accept it.

Until a small group of Mackay property owners decided to challenge the system, recently getting the Supreme Court to agree the extra charge was not legal. Talk of big refunds of investor rates bills caught our attention. And that of the State government, who’ve now legislated to validate this 2-tier rating system.

The argument? Investors can claim a tax deduction for the rates bill.

So I get a deduction for my car because I use it for work – but does that mean I should more for petrol or rego? If you need a uniform for your job that’s tax deductible too, but the dry-cleaning charge is no dearer. Is this a sound economic argument, or are non-resident property owners just an easy target politically? As media commentator Madonna King noted, “it raises the wider question of whether it is undemocratic for a council to make a decision like this about a group of people who own part of the community, but don’t have a right to vote in local elections.”

We’re not suggesting any changes to the right to vote, but it’s worth having a public discussion about government charges at all levels, and an open look at who is really paying what. This isn’t about wealthy landlords sitting on a pile of cash – if you tax a property owner then tenants will share that burden.

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