Unpaid Council Rates in Victoria Hit $920 Million, 2024/2025 Arrears Report
06-03-2026
Victoria's unpaid council rates have reached $920,556,009, growing by $104.7 million in a single year. Without proactive action from councils, Victoria is on track to exceed $1 billion in unpaid rates this financial year.
Payble has been tracking this data and producing research over the last 5 years in this year; releasing Payble's 2025 Victorian Arrears Report to provide insights on publicly available financial data across all 79 Victorian councils. For a summary of this please continue reading this article or download a full copy of the report here.
Why Arrears Are Rising
The causes for arrears growth in Victoria are both economic and structural. Housing, food and utility costs have outpaced wages for most households, eroding disposable income for most Australian families. Home valuations across the nation grew by an average of 8.6% in 2025, directly increasing the rates applied to properties.
The RBA lifted rates again in February 2026, adding further pressure to already stretched households. Roy Morgan data shows 25.3% of Australian mortgages, equivalent to 1,228,000 homes, are now at risk.
On the structural side, many ratepayers receive large lump sum notices with approximately 30 days to pay. For councils issuing rates in July with instalments due in February, there is often no communication between the first notice and the reminder seven to eight months later. Changes under the Local Government Amendment Act 2022 have also led to uncertainty among councils about pursuing outstanding rates, with many hesitant to act for fear of breaching regulations.
The result is a statewide arrears rate of 11.52%, a 10.6% increase year on year, with a 16.9% average increase in arrears volume per council. Payble forecasts a further 15 to 17% growth over the next 12 months.
The Regional Picture
Councils in urban Melbourne carry the largest share of arrears at 14.26%, but regional councils are growing faster at 14.20% year on year compared to just 1.09% for metro.
For councils with smaller revenue bases, that trajectory compounds quickly.
What the Data Shows About Councils Reducing Arrears
Councils getting on top of arrears are making it easier for ratepayers to stay on track before they fall behind. The report identifies three proven strategies:
- Bill smoothing. Offering weekly, fortnightly and monthly payment options reduces bill shock for households and prevents arrears from forming in the first place. It is now also a mandatory requirement under the December 2025 Ministerial Guidelines which we also summarised in an asset you can download here.
- Proactive SMS and email reminders. An estimated 86% of Victorian ratepayers take payment action when reminded via SMS before a due date.
- Addressing arrears by default. Automatically offering ratepayers with outstanding balances the ability to smooth amounts across the new billing period reduces inbound contact and gets accounts back on track without escalation.
Whitehorse City Council is a strong example. Despite 19.7% of mortgage holders being in housing stress, by partnering with Payble, Whitehorse achieved:
- Arrears rate of 9.08%, below the statewide 11.52%
- 95% collection rate as of September 2025
- More than 10,000 payments processed through flexible arrangements
Councils Leading the Way in 2024/25
Lowest Arrears Rate:
- Queenscliffe Borough Council — 1.53%
- Greater Geelong City Council — 1.81%
- Warrnambool City Council — 3.35%
- City of Melbourne — 4.04%
- Maroondah City Council — 4.55%
- Latrobe City Council — 4.63%
- West Wimmera Shire Council — 4.68%
- Wodonga City Council — 4.74%
- Bayside City Council — 4.81%
- Loddon Shire Council — 4.89%
Most Improved (change in ranking):
- Bayside City Council — +10
- Maribyrnong Council — +10
- Buloke Shire Council — +9
- Maroondah City Council — +9
- City of Whittlesea — +9
- Brimbank City Council — +8
- Surf Coast Shire Council — +7
- Ballarat City Council — +7
- Glen Eira City Council — +7
- Mount Alexander Shire Council — +7
Click here to download the 2025 Victorian Arrears Report to see where your council ranks, explore the full regional breakdown, and access the complete findings across all 79 Victorian councils.
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