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Over the past several years significant and in some areas, uneven movement in property values has caused a substantial redistribution of council rates amongst ratepayers within some council areas. In response, councils have implemented flexible payment arrangements and where appropriate rate capping measures. However, some seniors, who are pensioners, have found it difficult to pay their council rates. Even though they own property and are “asset rich”, their low income means they are “cash poor”.
The Local Government Act 1999 allows State Seniors Card holders to apply to postpone on a long-term basis part of their council rates. The deferred amount is subject to a monthly interest charge, with the accrued debt being payable on the disposal or sale of the property. However, the debt may be paid earlier at the ratepayer’s discretion.
FAQs
A ratepayer who holds or is in the process of applying for a State Seniors Card may apply for postponement of a portion of the Council rates payable on property they own or are buying if it is their principal place of residence (that, is the place lived in most of the time) and if no other person other than their spouse has an interest as owner of the property.
If you have a current mortgage over the property registered prior to 25 January 2007 you are required to have at least 50% equity in your property. If you currently have any mortgages or encumbrances on the property registered before that date you will need to obtain a statement from your financial institution which indicates the maximum credit limit secured by the mortgage, to include with this application form.
If you have a mortgage registered after 25 January 2007 there are no restrictions on the level of equity held.
At least $500 of the total Council rates bill must be paid plus the State Government Regional Landscape Levy, but an application can be made for any amount in excess of $500 to be postponed. You may pay the amount due in four instalments in the same way that the total amount of annual rates are payable. An example follows:
Total Rates amount $1500.00
Minimum amount payable $500.00 ($125 per instalment)
Amount of rates postponed $1000.00
Interest is calculated and compounded monthly on the postponed rate debt. The interest rate is prescribed in the Local Government Act 1999 (SA) and is set annually on 1 July, and may vary from year to year.[1] As an example, during the 2023/24 rating period, the charge would be based on an interest rate of 7.05% per annum
(or .59% per month).
[1] The interest rate applicable is the cash advance debenture rate (CADR), which is the cost for Councils of borrowing money as advised by the Local Government Finance Authority on 1 July each financial year.
You will receive a statement with each rates notice which sets out:
- the amount or postponed rates;
- the interest accrued; and
- advice of your ongoing entitlement to postpone future rates, or to pay off the debt at any time prior to the disposal or sale of the property.
The statement may be in the form of a separate notice or may be included on your quarterly rate notice.
You may also talk to the Rates team at council at any time if you have any queries or want more information.
Payment of your council rates may be postponed for one year only, or for any number of future years. Postponement of your council rates will continue automatically in each subsequent year after your initial application is approved until either the property is sold or disposed of, you no longer meet the eligibility criteria for postponement, or you advise Council that you do not want to continue with the arrangement to postpone rates.
The council may issue an annual declaration form with the annual rates notice to check you are still eligible and that you wish to continue to postpone future rates.
You're eligibility changes if you move out of your home, or are no longer entitled to have a State Seniors Card.
When your eligibility changes, you must inform the Council in writing within 6 months. In these circumstances, you are no longer entitled to postpone future rates. However, the postponed amount and accrued interest are not payable until the date of disposal of the property.
The agent or broker who is organising the sale, disposal, and settlement of your property will ask you to sign a form, which advises of the requirement, and authorises payment of all outstanding Council rate charges at the time of settlement.
The rates of debt and interest accrued will decrease the value of your equity in the property at the time of disposal or sale.
Seniors are encouraged to seek independent financial advice prior to making the decision to postpone rates. You may also like to discuss the option with a family member, beneficiaries, or another person you trust.
Remember, you can choose to pay off the postponed rates debt and accrued interest at any time if your financial circumstances change.
You will be required to complete an application form to enable Council to assess your application and verify your eligibility.
Please contact Council's Rates Administrator on telephone 8229 9999 or email rates@holdfast.sa.gov.au to obtain more information about the Postponement of Rates scheme and the conditions that will apply, and for any questions or concerns, you might have.