Whatever outcomes Noosa Council intended with its new rates structure for short term rental accommodations, huge numbers of ordinary residents who worked to fund their retirements by investing in holiday apartments are apparently just collateral damage.
I know because I am one of them. Last week’s half-yearly rate notice for our holiday-let apartment revealed a 47 per cent ($433) increase over the same period last year. The Tourism and Economic Levy of $51 last year has gone, but in moving our property from Category 23 to Category 26 (whatever that means), the general rate increased by almost 70 per cent, from $686 to $1159.
As I understand it, council was trying to target people who were short-term letting houses and apartments in residential areas without contributing to the tourism-driven economy. So how does that include the many thousands of property owners, like me, who bought into purpose-built tourist accommodation complexes years ago with the intention of self-funding their retirements?
Of the more than 100 units in the beautiful resort where we are owners, I understand that some are owner-occupied and some are short-term let on Airbnb and other platforms, but more than half, including ours, are in the holiday letting pool, contributing to the tourism economy through the payment of management fees. Why are we being gouged?
As one councillor told Noosa Today last week: “It looks like the rate structure was made using a very blunt instrument.” Indeed, and when the rate notices went out on 20 July, there was an immediate reaction of outrage from the managers of complexes feeling the sting. Mayor Stewart’s inbox was overflowing before the day was done.
Finola Thompson, who is deputy chair of the Noosaville Short Term Accommodation Association, as well as co-manager at Coral Beach Resort, wrote: “We urgently need your assistance regarding the rates notices sent out today. We have been contacted by several of our owners who are, frankly, in shock over the increase in rates compared with previous years … Whilst we understand that council decided to make some changes to the rating categories to remove the tourism levy, as that is now considered part of general rates, we were never advised that the increase would be anything other than in-line with the low inflation and Covid environments we are operating in … To expect our owners to take a 35-50 per cent rate hike at a time when their returns continue to be negatively impacted by Covid is unreasonable. Many of our owners have been invested in Noosa for over 20 years and have willingly paid a higher general rate plus the tourism levy without any complaints.
We can only assume that these rate notices contain some calculation error, as we cannot imagine that councillors would have voted for this size of increase.”
Managers at The Islander Rod McLennan and Cathy Parry-Moule wrote: “Our owners have saved to buy an investment unit and trust us to act as their letting agent … The extortionate increase in rates for tourist accommodation is particularly insensitive for property owners who are not tycoons or millionaires. They are mum and dad investors or grandparents or young professionals. We suggest that the increase is unfair and can only assume that our councillors were not aware of the far-reaching consequences of the implementation of the new rate categories.”
Adam Smith, manager at South Pacific Resort, wrote: “This massive increase could not come at a worse time, with income to apartment owners well down and our business also struggling with half the Australian population currently in Covid lockdown and our borders shut. Many of our investors have been looking at their options recently in regards to their apartments and my concern is that this rate increase (or money grab) by council will be the final straw for many of them and they will either sell their apartments or put in a permanent tenant to avoid the increase … a devastating blow to our already struggling business and to the tourism economy in Noosa as a whole.”
The managers raised some interesting questions, such as was there adequate community consultation, did councillors fully understand the ramifications of their vote, or was it a huge clerical error? “No, the staff is not going to take the fall for this,” one councillor told Noosa Today. “We knew exactly what we were doing and we’ll stand by it.”
And how is a strata-title managed “resort” different from a hotel or a motel, when both provide the same services for tourists but the hotels are exempt from this impost? “It’s designed to level the playing field,” said another councillor. In fact, it does the exact opposite. And if a desired result was to force owners into long-term letting for resident workers, what does that do for the bulk of Noosa’s tourist accommodations, which are managed complexes?
But even more poignant than the fears of the managers was the despair of the owners themselves. Alison and Alex, owners at South Pacific Resort, wrote to the mayor: “We are retirees who rely on the income from our investment property, having made a conscious effort to invest carefully and specifically in Noosa’s tourism industry because we saw this as a reliable growth industry. Now at a time of a worldwide pandemic that has had a crippling effect on travel and holiday accommodation, Noosa Council has chosen to target our diminished earnings even further. This is both opportunistic and cruel in its total disregard for the toll this will take on the savings and investment of people who can’t afford further losses.”
Owners at Coral Beach, who wished to remain anonymous, wrote: “I would appreciate your advice on what justification there has been for this level of increase. A cursory examination would tend to indicate fiscal incompetence if a rate increase of this magnitude was necessary. As a courtesy, and as ratepayers in Noosa Council area, could you please advise why this increase has occurred? Unless this is a severe mathematical error then councillors would have been fully aware of this level of increase, as it no doubt would have passed through council for ratification.”
At the time of writing, councillors willing to talk off the record and sources within council staff were all toeing the line that the rate gouge was transparent and in the community interest. No one is willing to admit that there may have been an error of judgement, a miscalculation, or even poor messaging. We told you what was coming and here it is, and if you get mowed down by a stray bullet, too bad.
A lot of ordinary Noosa citizens, people who pay their way and work for their community, don’t see it that way. There is a budget review in the spring. Let’s see if that brings a change of heart.
