What Happens if I Don’t Pay My Rates?

February 12th, 2023

5 min read

Paying your local government rates is an essential part of living in a community and ensuring that your area is well-maintained and functioning correctly. Unfortunately, many people do not understand the consequences of not paying their rates, and it can cause severe issues for them down the line. This article will dive into what happens when you do not pay your rates, the potential pitfalls, and the steps you can take to ensure you remain on top of your payments. Understanding the consequences of not paying your rates is important to avoid any potential financial hardship.

What You Need to Know About Council Rates

What are Council Rates?

Council rates are taxes charged on real estate by the local government. They fund local government services such as street cleaning, road maintenance, parks, and libraries. Council rates are not a specific percentage of the value of your property but rather a set amount per household in the area. According to Lending Loop Australia, council rates make up about 3.6% of taxes received by all levels of government and about 50% of local council income, council rates vary widely depending on where your home is situated.

Different councils have different rates and rules for calculating these, so check with your local council to find out what you must pay each year.

The Penalty of Not Paying Your Rates

When you do not pay your rates, you are essentially taking advantage of the community in which you live. As a rate-paying resident, you are part of a system where everyone does their part and helps keep the local government functioning. Council rate is a form of taxation and taxation is the lifeblood of the government which provides the needs of the community.

When you don’t pay your rates, it creates a burden for other ratepayers and puts stress on the city’s budget. You can be liable for late fees and penalties, and in an extreme scenario, the council may take legal action.

What to Do If You Can't Pay Them

If you cannot pay your council rates, the first thing you should do is talk to your local council to discuss your options. Many councils have assistance programs that can help you with your rates if you qualify. These programs are sometimes referred to as “rate relief”. Your council also has the power to grant you a payment plan if you are struggling to pay your rates.

While it can be daunting to ask for assistance with your rates, you are doing a great service to those around you by remaining honest and upfront about your situation. If you cannot make any payments towards your rates, you will want to contact your council immediately and let them know what your situation is. This will give you more time to try and find assistance and avoid legal consequences. While you are trying to get your rates paid off, it is important that you continue to communicate with your council and let them know how you are progressing.

According to the website of the City of Sydney, if a person experiences difficulties paying their rates on time, the city should be contacted to discuss alternative arrangements as they "may be eligible for a financial hardship determination."

Find Out What You Can Afford

In order to avoid any issues with your council, you should try to get a clear idea of what you can afford to pay each month. You should look at your income and other expenses to see how much you can reasonably afford to pay each month.

Once you have this number, you can then go to your council and use it as a guideline for what you should be paying each month. It can be tempting to try and pay as little as possible towards your rates, but it can create a lot of unnecessary stress for you later on. Again, you should work with your council to devise a payment plan that works for both parties. If your payments are affordable, it will be far less stressful for you and your family, as well as your local council

Look for Assistance Options

If you can’t find a payment plan that works for you, you should look into local assistance programs that can help you pay your rates. As mentioned, many councils have these programs, and it is not something to be embarrassed about. Doing everything possible to avoid legal consequences and keep your council happy is important.

Although they vary in every city, some of the most common types of rate assistance programs are the following:

• Discounted rates

• Payment plans/extensions

• Repayment plans

Split Your Council Rates into 4 Equal Payments with Wagetap

Council rates can be a big bill every year, but they don’t have to be stressful. If you are having difficulty meeting your obligations, you can work with your council to develop an affordable payment plan. If you don’t think that you can realistically make those payments each month, you can turn to Wagetap. This can make the payment much more manageable and allow you to avoid taking out a loan or having your credit score dented.

Wagetap offers two convenient options for paying your council rates bill.

Instant Cash to Pay Your Bill

The first is wage advance letting you borrow up to $2,000 of your wage before payday. This can give you some breathing room and allows you to cover part of your council rates bill. Once payday comes around, you’ll get the rest of your wage.

Spread Your Rates into a Stress-free Payment Plan

On the other hand, you can also spread your council rates out with Wagetap's split bill feature. With this, you can split your bill up into a stress-free payment plan and cover up to $600 of your bill upfront.

For more information about how Wagetap can help with your council rates, you can visit their website.