The Meander Valley Council in Tasmania's north has decided to sell three properties after the owners refused to pay rates on religious grounds.

The council claimed it was owed $9,332 in unpaid rates on one property at Mole Creek, and two at Chudleigh, one of which is the Melita Honey Farm.

The owners have not paid rates since 2010, arguing the land is owned by God and that paying rates would mean "bowing to a false god".

Councillors passed a motion to sell the properties on Tuesday, five to four dividing councillors.

Mayor Craig Perkins said any other decision would have set a dangerous precedent for the municipality.

"We've worked long and hard with the ratepayers, and tried to get them to understand that they are legally responsible to pay rates and they have chosen not to," he said.

"It appears that they've come to a fundamental view that they don't have to pay rates and they won't be paying rates, so we've made the decision we have.

"I'm hoping their reaction might be coming to terms with the fact that they have to pay rates, and that they might realise that we're serious about this."

The owners have refused to comment.

A report to the council considered at the meeting said officers had spoken to the family in November 2016, when they said they would not pay rates.

The most recent correspondence from the family cited in the report contrasted the council's adherence to the "law of the land" with the owners belief that:

"Our Heavenly Father is Sovereign and that He reigns today, thus we worship him alone so that his will is established on the Earth ... you are asking us to bow down to a false god which is something we cannot do."

The report noted the council could pursue the unpaid rates through the Magistrates Court, but recommended the council resolve to sell the properties to recover the money.

The family has previously confirmed they have refused to pay rates and confirmed the council's statements they believed the land belonged to the "Heavenly Father, [and] that the council would be taking the land from him and that was a matter between council and God".

Property sale divides councillors

The motion to sell the properties sparked debate within the council chambers.

Councillor Rodney Synfield put forward an alternative motion to refer the matter to the courts.

"I don't think it's at the point of last resort yet," he said.

"It's occupied, so it's different to the other properties [council] has sold in the past."

Councillor Ian Mackenzie was also of the view council had other options to explore.

"I didn't sign up to council to sell residences and businesses," he said.

But Councillor Tanya King argued there was a need to act, after years of unpaid rates.

"[Other ratepayers] are currently subsidising the family and their business," she said.

"All other options could cost ratepayers more money."

The council will work with lawyers to sell the properties.

Under the Local Government Act, any excess from the sales will go back to the property owners.

"Although they say they don't own the property so I'm not sure how they deal with that," Councillor Perkins said.