Mornington Peninsula Shire updating policy on overdue rates
Mornington Peninsula property owners who fail to pay rates are being warned they could have their house sold out from under them by the local council.
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Mornington Peninsula property owners who fail to pay their rates are at risk of having their house sold out from under them as the local council tries to claw back close to $15m in overdue property tax.
The council on Tuesday night voted to update a policy which gives it the power to sell a property on which rates have not been paid for three or more years and the amount owing is $5000 or greater.
A property owner could also be forced into bankruptcy by the council under similar circumstances.
Mornington Peninsula mayor Anthony Marsh said updating the policy would give the council a clear pathway to recoup unpaid rates. .
“The vast majority that do the right thing and pay their rates shouldn’t be expected to carry the burden for those who won’t contribute,” he said.
“When people don’t pay their rates that’s one less footpath, one less playground, one less pavilion for our community.”
Mr Marsh stressed the policy would not be enacted on principal places of residence or ratepayers suffering from hardship.
Ratepayers with a payment plan in place would also be exempt.
The extreme step is allowed under the Local Government Act, but rarely taken.
However, ratepayer lobby group Council Watch said the policy was “yet another example” of local councils having “too much power”
“As we’ve seen this week in Casey, the council can come onto your property at any time for any reason,” Council Watch president Dean Hurlston said.
“They are also entitled to sell your house.”
He said the debt threshold proposed by Mornington Peninsula Shire to trigger its policy was too low.
“During a housing crisis and a cost of living crisis the council could sell someone’s house and put them out on the street over a debt of $5000,” he said.
The council would have to seek an order through the Supreme Court to remove tenants from a property.
Mornington Peninsula Shire was owed $14,564,059 in unpaid rates as at December 4, 2025.
Of that total $5,985,109 was yet to be paid for the 2024/25 financial year.
Ratepayers can pay their rates in a lump sum, which was due on Monday, February 17 or via four instalments.
The council will review an update of its unpaid rates policy at a meeting on Tuesday night.
According to a council report the policy aimed to establish a “clear and concise framework in which to pursue all unpaid rates, charges and special charges”.
A council spokeswoman said the update reflected a “slight change in state legislation in 2022” which stipulated the policy could only be enacted if “no current arrangement, including a payment plan, exists for the payment of the amount to the council”.
The council’s existing policy, which was approved in 2018, states “matters of relevance” to be considered before deciding to forcibly sell real estate to recover unpaid rates and charges.
These included determining if the property was commercial and not the ratepayer’s principal place of residence.
The council did not respond to further questions including the number of properties where rates had not been paid for at least three years.