South Australian councils are owed $43m in unpaid rates

South Australian councils are owed tens of millions of dollars in unpaid rates — with some resorting to selling homes to recover debts.

Councils are legally allowed to sell homes with outstanding rates. Picture: iStock

• Metropolitan Adelaide councils seek ‘modest’ rate increases
• Marion Council has approved a plan to sell homes if owners don’t pay rates for over 3 years
• Playford seeks support for proposed rate increase of 3.9 per cent
• Salisbury ratepayers face a 2.5 per cent rate increase

South Australian councils are owed more than $43 million in unpaid rates, with at least eight homes sold in the past five years to recover some of the debt.

Onkaparinga Council — Adelaide’s largest local government area — has the biggest debt, with $5.1 million owed in outstanding rates.

It is followed by Playford and Marion councils, with about $3 million each.

Port Adelaide Enfield Council has rates in arrears of $2.6 million, Salisbury is owed $2.2 million. Charles Sturt, Adelaide City, Mitcham, Mount Barker, Gawler and Tea Tree Gully each have more than $1 million in outstanding rates.

The 21 regional councils who responded to The Advertiser and Messenger’s request for information, were collectively owed an additional $15 million in rates arrears, as of January 30 this year.

Yankalilla Council on the Fleurieu Peninsula was owed $1.18 million — or nearly 10 per cent of total rate revenue — among the highest proportional debt across all councils.

A table of how much councils are owed in unpaid rates

Its largest debt was a $143,000 rates bill owed on a commercial property.

Council chief executive Nigel Morris said 16 property owners were responsible for a quarter of the rates’ debt.

Nearly 250 of ratepayers’ debts to Onkaparinga Council date back more than three years, with the oldest — a debt of $33,417 — stretching back to 2001.

This is Adelaide’s oldest outstanding debt excluding a curious case from Mitcham Council where a property owner in the Adelaide Hills skipped the country in 1865 and died in England without leaving any known descendants.

The $30,000 debt was not discovered until 1998 when the Office of the Valuer-General alerted the council, which is still investigating how it can dispose of the land and recover the money.

Under the Local Government Act, councils can sell a property after the rates have been in arrears for more than three years.

Any money from the sale of the property can be used by the council to recover its debt as well as pay any costs incurred from the sale and any remaining taxes or mortgages before giving the remaining balance to the owner.

Eight properties have been sold in the past five years after their owners failed to take steps to repay their debts.

Three of these were each in Playford and Tea Tree Gully councils, one in Adelaide City and one in Salisbury.

Campbelltown Council at its meeting on Tuesday night agreed to list a house at Magill for auction as a “last resort” to recover rates owed.

Another three property owners in Campbelltown will receive legal letters over their unpaid rates.

The councils take into consideration if ratepayers are experiencing financial hardship or if they are elderly or unwell before agreeing to sell a property.

Almost all have residents on payment plans, with Playford Council having the most with 600 property owners paying off their rates in instalments.

This is nearly triple the next highest council — Mitcham — which has 214 people on plans.

Onkaparinga Council has just eight.

Onkaparinga chief financial officer Anthony Spartalis said the council tried to minimise its unpaid rates while taking into consideration the challenges faced by low-income households.

“As a first option we always try to negotiate payment arrangements with customers who are experiencing difficulties,” Mr Spartalis said.

“Payment arrangements on a weekly, fortnightly or monthly basis are possible and the account does not have to be in arrears for this option to be considered.

“But if rates remain unpaid and no payment arrangements have been negotiated, we will then explore legal action.”

A Playford Council spokesman said it had recently introduced a hardship policy to help those who needed extra support.

“Our hardship policy allows ratepayers experiencing financial hardship to receive appropriate assistance, including protection from further debt recovery and legal action that heightens their financial difficulties,” he said.

“It is very rare that we take properties to auction over unpaid rates and we engage with the social inclusion sector to help ratepayers who need support to access free, accredited and professional financial counselling assistance to prevent this from happening.

“We believe our hardship policy would be beneficial to all councils in South Australia”.