Gold Coast City Council Taxes Views

August 4, 2024 Edward Dever

In a move reminiscent of the window tax applied in England between 1696 and 1851 (as well as similar taxes in France and Scotland), Gold Coast City Council has introduced higher rates charges for owner occupied apartments on higher floors.

Dubbed the 'view tax', owner occupied apartments will be levied higher rates depending on the floor level.

Apartments above the 5th floor will be subject to a rates surcharge starting at 10-20% between floors 5-10 up to 40-50% for those above the 40th floor.

Council justifies the increased charges on the basis of charging owners fairly based on the effect that unit size and floor level has on a property’s value.

In simple terms, Council is implementing a wealth tax - taxing those residents it deems able to afford higher rates. This is similar to the window tax. It was designed to reflect a property owner's wealth as glass was apparently considered a luxury. It led to owners bricking up their windows to minimise the tax. Of course, as it is based on the floor level and not the view, Gold Coast residents will find it harder to avoid the rate increase.

Gold Coast high-rise apartment owners hit with 'view tax' as council raises rates

August 2024

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United States Plans Nationwide Rent Controls - With A Catch

July 17, 2024 Edward Dever

US President Joe Biden has announced a plan ahead of the 2024 US Election to cap rent increases across the nation at five per cent per annum.

On 16 July 2024, the Biden-Harris Administration called on Congress to pass legislation giving corporate landlords a choice to either cap rent increases on existing units at five per cent or risk losing current valuable federal tax breaks.

The proposal would apply during 2024 and the following two years but would only apply to corporate landlords who own at least 50 units of housing stock. Over 20 million units of rental housing would be affected by the proposal. An exception would apply to new construction and substantial renovation or rehabilitation.

Failure to comply would see these landlords unable to take advantage of faster depreciation write-offs available to owners of rental housing.

It seems unlikely Congress will get on board with the rent control proposal, particularly in the run up to the 2024 Election in November. (As an aside, former President Trump's son-in-law Jared Kushner's somewhat controversial family group controls 20,000 multi-family apartments and would be caught by President Biden's proposal.)

The Australian Greens will no doubt pick up on this proposal. Their plans to date have not included a minimum rental housing ownership threshold before their controls kick in. Their plan also has no sunset date - two years of rent freezes followed by a maximum two per cent increase every two years thereafter. The Federal government has repeatedly distanced itself from the Greens proposal. The Queensland government has also shut the door on rent controls - for now.

President Biden Announces Major New Actions to Lower Housing Costs by Limiting Rent Increases and Building More Homes

July 2024

Queensland Government Shuts The Door On Rent Controls - For Now

May 20, 2024 Edward Dever

On 10 May 2024, the Housing, Big Build and Manufacturing Committee released its report on the Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2024.

One of the more interesting matters in the Report is a statement that the Department of Housing, Local Government, Planning and Public Works believes forms of rent control are generally ineffective.

The Report (on page 20) states:

"the department noted that economic research has identified that rent price controls, such as restricting or limiting the amount rent can be increased by, are generally ineffective at improving rental affordability and can have other negative effects, such as reducing the quality of rental stock and reducing renter mobility. They noted that the best way to address rental affordability is by increasing housing supply."

The Greens continue to press the Federal Government to introduce a form of rent freeze followed by rent caps.

As recent as 16 May, Greens MP Max Chandler-Mather, commenting on Twitter/X about PM Albanese's move to evict his tenant ahead of a likely property sale, stated that "[i]f the Prime Minister wanted to treat renters fairly, he would coordinate a freeze and cap on rent increases". The Greens are unlikely to drop rent controls as part of their platform ahead of the next Federal election.

The Committee concluded that the Government's Bill should be passed although it noted a number of areas where the Department needed to do more homework.

These include:

- the time frame for the retention of tenant records

- wider consultation on a portable bond scheme

- the documentation needed for utility bills payable by tenants

- the prohibition of accepting more than four weeks rent in advance, and

- disclosure in leases of the last rent increase as it applies to newly purchased properties.

The Bill, when enacted, will restrict residential property rent increases to once every 12 months and apply the restriction to the property rather than the lease.

It will also legislate that a landlord cannot act unreasonably in refusing a tenant’s request to attach a fixture or make structural changes to the premises either relating to safety, security and accessibility, or for personalisation purposes. Tenants may seek recourse through QCAT if denied approval. This also applies to modifications related to strata common property with strict timeframes for strata approval.

Over time, we will see if some of these provisions act as a further disincentive to residential rental property investment in Queensland.

UPDATE - The Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2024 was passed by Parliament on 23 May 2024.

Report No. 7, 57th Parliament Housing, Big Build and Manufacturing Committee May 2024

May 2024

Further Proposed Changes to Queensland Residential Tenancy Legislation

April 2, 2024 Edward Dever

On 21 March 2024, the Queensland Government introduced the Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2024.

The Bill’s purpose is to further strengthen tenants’ rights and stabilise rents in the private rental market.

The proposed amendments include:

- adopting a standard rental application form (as yet only partially specified) which limits the information a tenant need provide.

- applying the 12 month rent increase restriction to the property rather than the lease, regardless of a change in property ownership. Lease breaks may lead to rent increases during future lease terms rather than at the commencement of the lease term.

- requiring leases to state the date of last rent increase, with tenants permitted to request evidence of such increase. Existing leases are exempt.

- prohibiting rent bidding, including accepting an unsolicited offer higher than advertised.

- capping reletting costs in the event of a lease break.

- legislating that a landlord cannot act unreasonably in refusing a tenant’s request to attach a fixture or make structural changes to the premises relating to safety, security and accessibility. Tenants may seek recourse through QCAT if denied approval.

- capping rent in advance payments to a maximum of 4 weeks rent - the amendment changes the prohibition on requiring an advance payment to accepting an advance payment. This may necessitate refunds in certain circumstances to prevent breaches although perhaps less problematic with periodic payment arrangements.

- adding new time limits for the provision of water service charges payable by a tenant.

One of the Bill’s stated aims is to improve the rental experience for Queensland renters and property owners. Some landlords may contend that the seemingly endless legislative amendments are having the opposite effect. Agents are also facing more compliance tasks and complicated leasing arrangements.

The deadline for submissions on the Bill is 10 April 2024.

RTA - Have your say on new rental law reforms

April 2024

The Lithium-ion Battery Condundrum Facing Landlords

January 12, 2024 Edward Dever

The increased use of lithium-ion powered devices such as e-scooters presents a conundrum for landlords and strata committees.

A rise in the number of lithium-ion linked fires in homes is occurring amid a vacuum of government standards for dealing with these risks.

"Research by the organisation EV Fire Safe found that if a battery goes into thermal runaway inside a home, there is a 64% chance of being injured and requiring hospitalisation, and a 7.8% chance of death."

While there are some fire extinguishers available to suppress lithium-ion fires, in the absence of government standards, some fire safety consultants are currently reluctant to make specific recommendations in relation to lithium-ion fires.

In the linked article, Professor Christensen advises that lithium-ion devices should only be charged outside.

The Owners Corporation Network, an independent body representing apartment owners, has now made a similar recommendation.

But how practical is this suggestion in the context of apartment living? And are landlords and strata committees really aware of the number of devices currently used in their properties? (OCN has suggested that strata management maintain e-scooter and e-bike registers.)

Given the number of devices in properties across Australia, the risk seems relatively small at present but experts warn the risk increases where people use cheaper mismatched chargers or engage in unsafe charging practices.

Fire blankets commonly available are inadequate for dealing with lithium-ion related fires. Fire blankets capable of suppressing lithium-ion fires are coming to market but are generally not of an appropriate size or realistically priced for home use. Over time, this should change.

The insurance sector appears silent on the issue. But there is a risk of fires from lithium-ion batteries forming an exclusion from future policy coverage or at least a reluctance on the part of insurance companies to honour coverage if (as yet undefined) appropriate charging practices are not followed.

In the meantime, landlords and strata committees await the development of appropriate government standards for charging lithium-ion devices and dealing with related fires.

The ‘ticking time bombs’ inside Aussie homes sparking a rising number of fires

Owners Corporation Network proposes new e-bike, e-scooter rules

January 2024

Historical Flaws in Malaysia's Torrens System?

October 24, 2023 Edward Dever

There are plenty of issues in Australia with poorly completed strata residential apartments. Owners are left saddled with huge defect repair bills after the developer has been liquidated or otherwise managed to avoid liability.

But imagine losing access to your apartment because the developer retained ownership of the common property and subsequently sold it to a third party.

That is the case in Malaysia with the saga of Sea Park Apartments where, due to the laws at the time, the developer was able to separately strata title six blocks of apartments while retaining ownership of the common area land, including the car parks and essential services such as sewerage and fire hydrants.

Crucial building plans which may have assisted apartment owners in their court battle mysteriously disappeared from the local Council and the Land Office.

The Sea Park Apartments saga has gone on for almost 20 years. In hindsight, the strata owners probably should have closed the transaction at the time the developer offered to sell the common areas to them in order to make the best of a bad situation. However, as the strata owners always thought they collectively owned the common areas (and only received their freehold titles a few years prior to the offer), one could understand any reluctance. Apparently, the main issue was the vehicle to be used for common property ownership.

For residents who live there, some for over 40 years, there seems no end in sight for this dispute.

The Apartments With No Entrance

October 2023

Ineffective Strata Minority Cram Down Rule Creates Problems

October 4, 2023 Edward Dever

The Queensland Government may wish to cast an eye towards NSW before finalising amendments to its strata legislation which will permit 75% of owners to terminate uneconomic community title schemes.

On 24 August 2023, the Body Corporate and Community Management and Other Legislation Amendment Bill 2023 was introduced into the Queensland Parliament. The Bill was referred to the Legal Affairs and Safety Committee for detailed consideration. The closing date for written submissions was a mere nine days later on 2 September. The Qld Law Society raised concerns in their submission regarding the short timeframe.

Under the proposed Queensland amendments, minority unit owners may be forced to sell their units in circumstances where there are economic reasons for terminating the scheme supported by 75% of the scheme owners.

This reform was described as "deliver[ing] a key action of the 2022 Queensland Housing Summit by reforming the BCCM Act to allow for termination of uneconomic community titles schemes to facilitate renewal and redevelopment."

The Bill's Explanatory Notes specifically refer to "having regard to the New South Wales approach."

The only problem is that terminating schemes in NSW has not been that simple with only a handful of schemes apparently managing to negotiate a sale. Developers are now saying they "aren't interested in buying older buildings unless there’s 100 per cent agreement from owners to sell."

Designed to protect the elderly owner from unscrupulous developers, at least in one instance in NSW, the reverse seems to have occurred - protecting a rival developer from the building's elderly owners. The NSW amendments have not prevented strategic blocking attempts by competing developers.

The NSW Minister for Better Regulation and Fair Trading has vowed to fix the glitches. “The NSW government is committed to updating and reforming this system, including fixing the loopholes that have made it out of date."

Perhaps the Queensland Government will revisit its amendments before passing a Bill with baked-in glitches, at least based on the NSW experience.

The Legal Affairs and Safety Committee is due to hand down its Report on 6 October.

This law was meant to solve Sydney’s housing crisis. It’s left owners devastated

Legal Affairs And Safety Committee - Body Corporate and Community Management and Other Legislation Amendment Bill 2023

October 2023

Minimum Housing Standards Commence in Queensland

September 20, 2023 Edward Dever

From 1 September 2023, any new residential lease in Queensland or lease renewal is subject to the new minimum housing standards requirements. All remaining leases will be subject to the requirements from 1 September 2024.

Some of the requirements such as adequate plumbing and drainage, connected water supply and a functioning toilet seem obvious to most landlords.

However, these requirements, together with items such as functioning latches or locks on external doors and windows, effectively place an onus on the agent and owner to confirm compliance prior to any new lease or lease renewal.

There are already examples of agents advising owners they will not lease properties that, in their view, do not comply with the minimum housing standards.

Tenants have a variety of remedies where a residential rental property does not meet the minimum housing standards.

These include ending the tenancy within seven days of occupying the property, requesting emergency repairs, or applying to QCAT for a repair or termination order.

Minimum housing standards fact sheet – general tenancies

September 2023

Rent Freeze Proposal Gets Frozen Out At National Cabinet

August 24, 2023 Edward Dever

Landlords could be forgiven for feeling a little confused, particularly those with investment properties in different States.

Last week, National Cabinet ruled out imposing any form of rent freeze as demanded by The Greens.

The Greens proposal involves a nationwide two year rent freeze followed by a maximum 2% increase every two years thereafter with no end date.

Then it gets a little confusing.

For example, in Queensland, the Greens Residential Tenancies and Rooming Accommodation (Rent Freeze) Amendment Bill provides for rents to be frozen as at 1 August 2022. Qld Parliament's Community Support and Services Committee has recommended against passing the Bill.

The Greens NSW Rent Freeze Bill specifies 30 June 2023 as the relevant date. The NSW Bill is silent on what happens after the initial two year rent freeze.

The Greens Federal Freeze on Rent and Rate Increases Bill stipulates that rents will be frozen as at 1 January 2023.

Instead of a nationwide rent freeze or rent caps, National Cabinet prefers a nationally consistent policy on renters’ rights including reasonable grounds for eviction, minimum rental standards, and limiting rent rises to once every 12 months.

Many of these outcomes have already been implemented in Queensland. New minimum housing standards rules come into effect in Queensland for new tenancies on 1 September 2023.

Meanwhile, The Greens are softening their stance, with their chief spokesperson on the issue moving away from a strict rent freeze to some form of rent cap.

Even The Greens-promoted polling from The Australia Institute shows only minority support for a rent freeze among voters from all parties, including The Greens.

Some landlords may take comfort from the statements following National Cabinet, thinking the rent freeze saga is at an end.

Others may continue to raise rents disproportionately on the basis that, while the issue may be dead, it is not buried and some form of rent freeze may still be forthcoming.

Meanwhile, The Greens will continue to campaign on the issue of rents and the Prime Minister is no closer to passing his housing bill.

Stories of rogue agents and massive rent increases at the current hearings of the Federal housing inquiry will keep the issue in the headlines.

From public holidays to rental freeze and housing supply, National Cabinet showed there are limits to Anthony Albanese's power

August 2023

Potential Reform to Qld's Annual Rent Increase Frequency Limit

July 17, 2023 Edward Dever

In April 2023, the Queensland Government amended the Residential Tenancies and Rooming Accommodation Act 2008, with effect from 1 July 2023, to prevent landlords increasing rent more than once in each 12 month period. The reform was enacted with little industry consultation and bypassed Parliamentary Committee review.

One apparent consequence of this reform has been the eviction of tenants by some landlords so that rents can be increased with greater frequency. This is despite no fault evictions being heavily restricted under previous reform amendments in October 2022.

The Government now proposes that the rent increase restriction apply to the property rather than the tenancy agreement.

It is not clear how widespread the practice of no fault evictions to circumvent the rent increase restriction has become and whether it is limited to the period up to 1 July 2023, the reform's effective date. As the Qld government points out, in other States, the rent increase restriction generally applies to leases not the property. This does not appear to be a widespread issue in those States.

The deadline for feedback on the latest rent reform proposal is 11 August 2023.

Discussion Paper - Ensuring the annual rent increase frequency limit is effective

July 2023