Gold Coast councilors push to scrap rate cuts for property investors

Ryan Bayldon-Lumsden is one of 14 councilors representing Gold Coast City Council, Australia’s second largest local government.

But the 29-year-old doesn’t pay tariffs.

Cr Bayldon-Lumsden worked as a teacher and disability support worker before being elected in 2020 but spent his savings on the campaign.

Like many young Australians, Cr Bayldon-Lumsden said he was unable to break into the housing market, even on a councilor’s salary of $156,000.

“[I’d] never say that I had financial difficulties,” he said.

“I have friends whose rent has gone up $50 to $200 a week over the past few years because the market has changed so much.”

He said the properties they were renting hadn’t changed.

“But values ​​have gone up so much that investors, landlords, can rightly ask for these big rent increases,” he said.

Soaring rents prompted Cr Bayldon-Lumsden to join a small group of advisers seeking to reduce rate discounts for investment property owners.

New Revenue Estimates

Mayor Tom Tate announced Thursday that this year’s budget will include a rate increase of at least 4%, the highest in a decade but still below the CPI of 5.1%.

Households, including homeowners, who pay their rates early or on time are eligible for a 10% discount under municipal concessions.

But at a special budget meeting this week, Councilor Glenn Tozer sought to scrap that rebate, which roughly equated to $250 per household for the Gold Coast’s 94,000 investment properties.

Cr Tozer said it could increase council revenue by around $20 million a year.

“Now is the time to start having a conversation about it,” he said.

According to Cr Tozer, the strength of the real estate market means that investors can afford to lose their rate discount.(ABC Gold Coast: Dominic Cansdale)

“With 30% of these investment property owners living out of town, we need to find ways to put downward pressure on rates and funding for important community projects.”

Cr Tozer said it seemed appropriate and reasonable to reconsider whether the discount was appropriate or not.

“Australia’s tax office already provides incentives for investment property owners to pay their rates on time,” he said.

“It’s an expense that can be claimed.”

Problem likely to return next year

But the proposal was rejected by a majority of councillors, including Deputy Mayor Donna Gates, who said the cost of removing the discount could be passed on to tenants.

“We need to take care of the whole city right now to maintain the status quo as much as possible,” she told the meeting.

She said the Gold Coast was one of the few local governments to offer the cut and people had come to expect it.

Advisor Herman Vorster said he feared losing the rebate was “the straw that broke the camel’s back” for some investors.

“If Cr Tozer proposed that these new revenues be used for projects x, y and z, maybe we can understand what the trade-off might be,” he said.

Cr Tate said debate on the issue should be considered earlier in next year’s budget process.

Cr Bayldon-Lumsden said people who rented already had to pay an extra $150 a week.

“They’re not going to move out of the rental they’re in for $5 a week,” he said.