Mornington Peninsula Cracks Down on $15M in Unpaid Council Rates

Property owners on the Mornington Peninsula are facing increasing scrutiny, with the local council moving to recover over $15 million in unpaid rates. At a recent confidential meeting, Mornington Peninsula Shire Council revealed it may resort to forced sale of commercial properties and vacant land where debts have gone unpaid for more than three years.

This isn’t the first time the council has flexed its legislative authority. In 2017, it considered selling 153 properties over $1.4 million in unpaid rates. This time, however, the stakes are much higher, and the council is sending a very clear message: compliance is not optional.

What sets this action apart is the strict exclusion of principal places of residence or properties where genuine hardship applications have been accepted. According to Mayor Anthony Marsh, this approach seeks to preserve fairness for ordinary ratepayers, while targeting long-term defaulters who have ignored payment plans or council engagement for years.

It’s important to understand the legal basis for these actions. Under the Local Government Act 1989 (Vic), s181, councils may sell land if rates remain unpaid for more than three years and proper notice has been given. While the public often perceives this as a drastic step, it remains one of the few levers councils can use to enforce financial responsibility.

As of December 2024, the Mornington Peninsula had accumulated $14.6 million in unpaid rates—nearly $6 million of that from just the 2024–25 financial year. The revised council policy now allows action where more than $5,000 is owed, the property is not a residence, and no hardship application is active.

Public sentiment is divided. A recent local poll shows 59% of residents oppose the council’s right to sell property for unpaid rates, while 41% support firm action against persistently non-compliant owners. With property values continuing to climb across the Peninsula, this tension between revenue enforcement and property rights is likely to escalate.

For property owners, this development serves as a timely warning. Unpaid rates can—and will—affect your title. If you are an investor, developer, or own vacant land, you should be acutely aware that failure to meet obligations may now lead to forced council sale.

As a seasoned conveyancer, I regularly encounter the consequences of unresolved council debts—particularly at settlement, when they must be adjusted or cleared. But this situation extends beyond routine adjustments. Council action could result in your property being sold from under you—legally and publicly.

If you're uncertain about where you stand on rates, or you're considering a sale where significant council arrears are present, seek immediate professional advice.