Water Rates - Who pays what?

We have had several calls from clients this week who have received the new water service invoice from Ben Lomond Water. Many are confused by the account and want to know who pays for what?

You may be aware the water usage no longer forms a part of the rates for the property, it is a separate entity and controlled by the new Tasmanian water and sewage corporation.

The interesting thing is that many clients have suggested that their rates have not been reduced by the amount they have been billed for water? According to Ben Lomond Water, this is for two reasons, one because some councils have actually increased rates at the same time the water changes occurred, secondly the water rates have increased by 10% and are set to increase 10% every year for the next 3 years.

The other question is what part of the bill can be passed on to the tenant? The answer is, none of it. The service charges are to be paid by the owner. The water usage will arrive on a separate bill and this can be passed onto the tenant as long as they have resided in the property for the period of the notice. As company practice we will pro rata the bill for the period the tenants have occupied the property and invoice them on behalf of our clients.

We also offer a free service to our clients and pay the supply installments from the rental income to provide accurate tax records.

In short, the council rates and the water rates have been increased and in some cases you are paying up to 50% more than previous years.

Many property investors will see this as an opportunity to increase rents, and in some cases this may be warranted. My advice when considering a rent increase is to look at the overall market conditions to ensure the rent in not inflated otherwise you may find you have more to lose through vacancy.

If you would like a market opinion or rent review please fell welcome to contact us any time.