“Tenant Tax”: Edge Hill property realtor sparks petition against Cairns Council’s proposed rate rise

However they sell it, Cairns Council will still have to watch its constituents gag on a sour rate rise pill in 2023, despite a councillor’s reassurance new rates will be low. Read what he said.

Cairns Division four councillor Terry James has told top Edge Hill realtor Billy Gartner he expects the new rating category on non-principal places of residence (N-PPR) to be kept between 15 and 25 per cent on top of base rates, which account for about 40 per cent of a Cairns residential property’s total rates bill.

Despite the reassurance, Mr Gartner, director at Edge Hill’s Professionals real estate agency, said his clients, who were informed of the rate rise by a skeletal letter in the mail, are fuming.

“My phone started ringing the minute my clients read that letter,” Mr Gartner said.

“The way the letter was written was dumb … almost as if to frighten people.

Professionals Edge Hill director Billy Gartner has created on online petition against, what he calls, the Cairns Regional Council's proposed "tenant tax". Picture: Isaac McCarthy

“We’ve lost 100 investment properties over the last 12 months … well over 90 per cent are being snapped up by owner-occupiers.

“If the council need to raise rates, why would they target the people providing rental stock to the market?”

Mr Gartner has formulated an online petition calling for the council to scrap what he’s dubbed the “tenant tax”.

In five days it had gained its goal of 1500 signatures.

Cr James, speaking personally and not on behalf of council, said he thought the actual cost increase to 75 per cent of properties targeted would likely be tantamount to “half the price of a takeaway coffee per week”.

“I’m tipping it to be 15 per cent; and, that will be on top of the base rate, not the total bill. That’s about a $2.70 increase per week.” Cr James said.

“We anticipate the majority of N-PPR property owners will receive an increase of between $150 and $300 per year. These are for properties with a land valuation between the minimum and the median, which is approximately 75 per cent of properties identified.

“Included in this are building units, strata title, of which 99 per cent are on the minimum.

“The council promised never to go over CPI, and we’ve kept that promise over 10 years … to the point where the state government is saying to us our rates are too low.”

Cairns Division 4 councillor Terry James. Picture: Isaac McCarthy

Cr James said the new rating category, though scoping for income-generating properties, might not be applied as strictly as people are fearing, and allowances may be made for individual circumstances.

“The first letter that was sent out was our staff trying to find out who has (N-PPR) properties,” he said.

“We have sent out approximately 28,000 letters to property owners. We expect quite a few principal place of residence declarations to come back and anticipate 25,000 to 26,000 to be N-PPR.

“If it’s an Airbnb, we’ll definitely been targeting that. But I’ve heard from people who are housing vulnerable members of the community in their properties for cheap rent. That’s the sort of thing we need to know.”

Cr James said the council was yet to conclude the final details of the measure.

“The whole thing has to come to a report next year and council has to vote on it,” he said.

Jodie Charman, who owns an investment property in Whitfield, said she fears for tenants who could be pushed out of their homes by yet another cost that landlords will be forced to pass on in rent increases.

Conus Business Consultancy Services partner Pete Faulkner.

“We’re going to be forced to put up rent – we’ll have no choice. It’s not that we want to,” Ms Charman said.

“There are families living in those properties and they’ll be the ones who are affected.

“Landlords fill a void in the market as government is not meeting demand for social housing. “We play a very important role in housing Australians.

“Now we’ve got an increase in council rates coming when interest rates are rising … it’s just wrong.”

Pete Faulkner of Mission Beach’s Conus Business Consultancy Services said landlords’ concerns about the clash of heating interest rates with the council’s new rating category for N-PPR were not an overreach because Australia’s futures market is predicting interest rates to be at their peak in the third quarter of 2023.

“Even if we see a peak in interest rates then, we’re not likely to then see them drop off sharply,” Mr Faulkner said.

“The market is predicting rate cuts won’t come until the middle of 2024.”

Originally published as “Tenant Tax”: Edge Hill property realtor sparks petition against Cairns Council’s proposed rate rise