Mum and dad investors jittery over Cairns Council’s new residential rates
There are fears a new non-principal places of residence rates scheme could cause rents to soar and the housing crisis to worsen by spooking property investors. HOW IT WOULD WORK
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MUM and Dad investors with residential properties in Cairns could feel jittery with Cairns Regional Council revealing it would bring in a new rate base for ‘non-principal places of residence’ in 2023-24.
The council’s chief financial officer Lisa Whitton said the new category would impact about 30 per cent of properties.
Chief executive Mica Martin emphasised there would be no change in rates on properties defined as non-principal place of residence in the 2022-23 budget.
“Today, council flagged its intention to introduce a new rating category in the 2023-24 budget,” Ms Martin said.
“Early estimates suggest that this proposed new rating will affect somewhere in the area of 30 per cent of rateable residential properties, however more work will be done over in the new financial year to precisely forecast this figure.”
She said the council would engage with ratepayers in coming months to gather information ahead of the 2023-24 budget.
The reform has been flagged at a time when the Far North is facing a desperate housing crisis with families struggling to find rental properties, as many investors choose to sell up.
Cairns Property Rentals property manager Elizabeth Moll said the move could worsen the region’s housing crisis.
“The majority of my rentals are long-term investors and I feel a rate increase on their rental properties will put a lot of people off investing,” she said.
“It will depend on the rate rise for investment properties but I do think a lot of people will be getting out – and council increases the rates it will only put up the rents.”
Last week, in an attempt to force properties back into the general rental market, Brisbane Lord Mayor Adrian Schrinner announced local property owners who listed their homes for short-term accommodation would face a 50 per cent rate hike.
Cr Rob Pyne said it was frustrating the change in Cairns had taken so long, insisting people’s homes were not the same as investment properties.
“Your principal place of residence should not be rated the same as an investment property, we all need somewhere to live but to have an investment property is a choice,” Cr Pyne said.
REIQ Far North zone chair Tom Quaid said the current crisis was due to a scarcity of properties, but owners would face a decision on whether to push up the rental cost.
“It is a plan that targets those with multiple properties to increase council revenue without targeting owner-occupiers,” Mr Quaid said.
“Every time there is a cost increase, landlords will want to cover that cost however they can, but some leave things be with good tenants in place – I don’t think it is going to push rents up significantly but if an owner was tempted to leave things as they were, they might reconsider with an additional cost.”
As the Far North digested the details of the budget with an average 3.1 per cent increase for rate payers, Cairns resident Katie Townsend was out enjoying the Esplanade with two-year-old daughter Harmony.
She said locals would be worried about the burden of rate rises.
“For the past two years a lot of people have been put in a position where they can’t control where their life is going,” she said.
“To add more pressure, especially to Queenslanders who have been battling to keep afloat is ridiculous.”
Ms Townsend was concerned costs will pile up.
“It’s not really what we want,” she said.
Attempting to break into the housing market, Graeme Rayner from Cairns North, said the increases act as a deterrent.
“It’s going to hurt, interest is going up and the cost is just getting passed on,” he said.
“It’s one thing if you can even afford to buy a property … I think this is an injustice.
“It’s unfortunate they can’t do something to minimise it.”
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Originally published as Mum and dad investors jittery over Cairns Council’s new residential rates
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