The Real Estate Institute of Queensland (REIQ) has hit out at the City of Gold Coast for slugging unit owners living on higher floors of apartment buildings with huge rate hikes.
REIQ Chief Executive Officer, Antonia Mercorella, said the “view tax”, as it is colloquially known, could prevent people buying high level apartments and potentially stymie higher density as a solution to the housing crisis.
Under the rate rises, high-rise apartment owners living on the 40th floor or above have been hit with a rate increase of up to 50 per cent.
Owner-occupiers between the 21st and 40th level have seen rates rise up to 40 per cent, while those on floors between 11 and 20 are up 30 per cent.
For those on floors five to 10, rates have risen up to 10 per cent, while for the lowest five floors there has been no change.
There is an increase of up to 10 per cent for those living on floors between level five and 10, but no change to rates for units below the fifth floor.
Ms Mercorella said she was surprised and disappointed in the way the changes to rating categories for over 12,200 high-rise units were executed by the council, with no prior consultation, education, or phasing of the introduction.
“Colloquially known as a ‘view tax’ but certainly not common place in Queensland, this is an arbitrary way of raising rates masked as creating greater equity,” Ms Mercorella said.
“It’s concerning when you consider we’re all hoping that greater density by ‘building up’ will be part of the solution to our state’s housing crisis.
“People are choosing apartment living over freestanding houses largely due to greater affordability and access to shared facilities.
“They would never have guessed that buying on the 21st floor as opposed to the 20th floor, for example, would come with ongoing penalties.”
Ms Mercorella said it was “nonsensical” for a council to assign a derived value capture for views.
“Views are not public infrastructure that the local government provides which they can seek a return on investment – it’s the natural environment,” she said.
“If anything, given apartments share facilities, they are often more efficient and less taxing on council services such as roads, sewage, water and rubbish collection.
“We appreciate that generally speaking, elevation can attract a premium price at the time of sale, particularly when the penthouse is concerned, noting that unless you sell, this value isn’t realised.
“However, ultimately the market will determine the value which will take into account numerous factors unique to that apartment building and the apartment itself.”
Ms Mercorella said the REIQ was “curious” to see how the floor tiers and rate categories were calculated.
“We caution councils that unexpected and unfair rate hikes based on formulas plucked from the air can erode the trust and confidence of buyers and the homeowners who are your constituents – property owners are not a bottomless money pit,” she said.
A City of Gold Coast spokesperson told ABC News that the charges ensured fairness and equity across all ratepayer categories and reflected the impact height and unit size had on a property’s value.
“This change will also bring rates in line with the method used for other units that are permanent or short-term rentals,” the spokesperson said.
