South Australian councils resort to selling properties to recoup unpaid rates

Ratepayers are walking away from their properties to avoid selling costs, an outback council claims. It’s among many taking steps to recoup unpaid rates – search for your council here.

Councils across the state are chasing a whopping $37 million in outstanding rates, with more than 50 properties set to be sold off this financial year. Picture: Supplied, realestate.com.au

Councils across the state are chasing more than $37 million in unpaid rates, with The City of Onkaparinga at the forefront, with over $10 million in outstanding rates.

Councils are resorting to drastic measures to recover years of unpaid rates, including the forced sale of 32 properties last financial year.

Councils will also sell over 50 properties this financial year in a bid to claw back years’ worth of unpaid rates.

Councils referred about 17,263 people to debt collectors, while 595 property owners faced legal action for neglecting to settle their council rates for over three years.

However, the statewide figure is likely much higher as only 32 of the 68 SA councils have responded to the survey as of September 24.

District Council of Robe, Light Regional Council, Naracoorte Lucindale Council, City of Unley and Wakefield Regional Council refused to release their figures.

A two-acre property at 46 Havelberg St, Whyalla Stuart was listed for an auction on Friday. Picture: realestate.com.au

WHEN CAN SA COUNCILS SELL PROPERTIES

Councils can sell properties if owners have had outstanding bills for more than three years but must first go through a process of recovering debts and offering assistance through payment plans.

Local Government Association president Dean Johnson said councils do not receive “a windfall” from the sale of properties.

“Everything over and above recovering council costs goes to other creditors, or the property owner, or the Crown, depending on the situation,” he said.

City of Onkaparinga

One in 14 Onkaparinga ratepayers failed to settle their bill last financial year with the council recording $10m in outstanding accumulated rates as of June 30.

Despite the debt the council is not selling off any properties but a council spokesman said it was reviewing how to “pursue long-term outstanding accounts”.

He said unpaid rates meant the council had less cash available and it may be forced to borrow money and consider how it funds projects and services.

“Outstanding rates do not impact our ability to deliver the essential projects and services our communities rely on,” he said.

“They do, however, have an effect on how a small number of these projects and services are funded.

“Selling properties is always a last resort for council, and throughout Covid-19 we paused actively pursuing outstanding rates to support the community through the pandemic.”

45 Phillips St, Whyalla Stuart is to be sold because of unpaid rates. Picture: realestate.com.au

Adelaide Hills Council

The Adelaide Hills Council is set to sell six properties in Uraidla, Stirling and Crafers West.

Chief executive Greg Georgopoulos said the council had not sold properties last year due to the impact of Covid on the community.

“Council does not seek to gain profits from the sales of these properties, but rather only seek to recoup what is owed through rates,” he said.

“Unpaid rates can have a long-term impact on council’s financial position, so it is important rates are paid to ensure services, programs and projects can be delivered to the community.”

Northern Areas Council

A total of five properties will be sold by the Northern Areas Council after the owner failed to pay their rates.

A spokesperson told The Advertiser the council had engaged a real estate agent to auction four vacant blocks and one unoccupied house across Gladstone, Georgetown and Caltowie.

The oldest outstanding debt – 17 years – is $5625.27 owed on empty land at Third St in Caltowie.

The council has spent $777.62 in legal cost trying to recoup the unpaid rates.

District Council of Coober Pedy

Selling properties to recover unpaid rates has become a trend in Coober Pedy where the council will be forced sell off six properties this year.

It follows the auctions of 11 properties last financial year and 33 in 2021-22.

Corporate services manager Salomé Lorente said unpaid rates was a recurring issue because

of a high number of underdeveloped vacant lands.

She said many of the properties had a significantly low value for “quite high rates”.

“For some owners, it is easier to disappear and walk away from their property than pay the rates or try and sell it,” she said.

Ms Lorente said Coober Pedy was the most struggling council in the state with a lot of debt and little income sources.

“The community is paying the price of maladministration from years ago,” she said.

“This now means that council has to increase the rates to pay off its numerous debts.

“Some residents now think they can stop paying their rates and wait for council to sell their properties rather than try and sell it.

“It is very important for residents to realise that this is not an option and that council will follow its Debt Recovery Policy which possibly means go to court through the debt collection agency if there is no payment.”

3 Foote Place in Whyalla Stuart was auctioned. Picture: realestate.com.au

Whyalla City Council

In one of the most recent forced sales, Whyalla Council auctioned off 17 properties with an estimated property value of $1.6 million, last Friday.

“We have made repeated attempts over a number of years to contact the owners to put payment plans in place but have not been successful,” a Whyalla City Council spokesman said ahead of the auctions.

He said many of the property owners had not paid rates for more than a decade.