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Landlords in Mackay, Queensland have taken legal action against their local council over increased rates on their investment properties.
Mackay Regional Council announced in July that it had introduced a new non-owner occupier residential rating category as part of its 2013/2014 budget.
Owners of investment properties now pay an average $205 a year more in their general residential rate than the average owner occupier, the council has said.
This will equate to an additional $3.94 extra per week across 9,700 properties, which is about 16 per cent of the region’s rate base.
Mayor Deirdre Comerford said the aim was to ease the rates burden on those living in their own homes.
“This category is nothing new; it is something 10 other Queensland councils have already introduced and it provides greater equity across the rates base,” she said.
However, according to local media reports, landlords are furious with the council, with one local man - Ayril Paton - organising a petition against the change.
He told the Daily Mercury he had seen an increase of $234 in his yearly rates, not including levies, sewerage and water.
“I know council has to cover the costs, but it should be spread across the entire community and not just pinpointed on a lot of people, thinking they must have money because they own a house,” he said.
Rates notices were sent out in the last month, during which time Mr Paton approached property managers and landlords in the area to sign his objection letter.
Managing director of Mackay Rentals Barbara Mayfield distributed the petition to her landlords, which has since been signed and collected by Mr Paton.
Ms Mayfield told Residential Property Manager the rate increases were “out of character”.
“It’s totally unfair,” she said. “When you’re an investor, you pay a higher stamp duty when you purchase, you pay a higher interest rate through the bank, when you sell you pay capital gains, it doesn’t cost the council any more to look after an investor house than to look after an owner-occupied house.
“But there are also other consideration, such as you might own two houses and you might have your children live in one, so you don't receive any rent anyway.”
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