A dilapidated, abandoned home in inner-city Sydney is causing anger in the neighbourhood as rubbish piles up and nobody knows who or where the owner is.

The property, a two-storey terrace in a prime position in Surry Hills, was last owned by now-deceased James William Walton and Alice Mary Koller.

The property, on Waterloo Street, is now thought to be worth more than $1 million, with the house next door selling for $1.05 million in 2014.

The terrace, with its smashed windows and paint peeling off the walls, has been causing damage to the neighbouring properties, with dampness penetrating through the adjoining walls.

The City of Sydney said it was working to overcome practical and legal barriers that would force the mystery owner to clean up the property.

The council believes a daughter may have lived in the house but she has been unable to be tracked down.

Then there’s the anonymous person who paid $200 through the Coogee Post office in 2008 towards the property’s outstanding rates and charges.

Last month, council staff placed a notice on the front door advising the unknown owner of its intent to order the removal of a large tree, overgrown vegetation and broken windows.

A City of Sydney spokesperson said that if no owner comes forward, the council could seek a court order to have the tree and the rubbish removed by council officers.

The law also allows for the council to sell private land in order to recuperate debt that has been outstanding for more than five years.

In this case, the property has around $20,000 in outstanding rates and charges, dating back 15 years.

But the council’s previous attempts in court to force the sale of the property and recoup the debt faced a stumbling block after the mystery $200 was paid from the Coogee Post Office, but proceedings recommenced in 2013.

“Council officers are also working toward seeking a council resolution to force a sale of the property against unpaid rates under the Local Government Act,” the spokesperson said.