The warning comes from a business owner, who has already approached council for rate relief and been offered a deferral based on a 72 per cent drop in trade and income due to the pandemic and its associated trading restrictions.

Lloyd Deane owns the Belvoir Village Motel and leased the business to new operators in March as COVID struck.

But the first part of a double whammy came two months earlier when the value of his property increased, triggering an added council rate bill.

Mr Deane believes his predicament is being played out many times over, particularly in the accommodation and hospitality sectors, which will inevitably translate to less business rate income this financial year.

"It's the elephant in the room," he said.

"There are so many businesses in Wodonga with figures which are way down, but the rates are still what they were.

"Rates are connected to the valuations and after revaluation in January properties are now over valued, the income is not there to pay the rates.

"We're all walking on quicksand."

Business Wodonga chairman Graham Jenkin agreed.

He said accommodation and hospitality have never experienced tougher trading conditions in the city's history with cumulative impacts of High Street road upgrades, drought, bushfires and COVID-19.

"It is an issue for everyone in the accommodation and hospitality sectors where revenues are down by 75 per cent or more," he said.

"The value of properties rose pre-COVID due to the city's growth, but those business values would have plummeted as a result of declined revenue.

"It's further proof the state government needs to open up regional Victoria to regional Victorians now.

"It's a serious issue the incoming seven councillors will confront straight away, so immediate support for business is needed which in turn helps council protect its own income."

The butcher shop opposite the post office has been vacant for three years, but has been leased with a beauty salon hoping to open before Christmas.

Cafe Grove shut in late 2019, the former Coles supermarket awaits redevelopment, the travel agency on the corner of High and South streets closed when the pandemic hit and the Carv'n It Up shop also shut 12 months ago.

Council chief executive Mark Dixon said it was focusing on lobbying all levels of government to reactivate the business economy.

"While the council has received about a dozen applications from businesses experiencing financial hardship, it has already received a dozen inquiries from businesses looking to open or expand in Wodonga, demonstrating a continued level of confidence in our growing city," he said.

"The council's internal rates and charges hardship directive guides the waiving and deferral of rates, interest or charges based on assessment of each individual case.

"We have simplified the process to have outdoor dining and advertising into one simple permit and once submitted, businesses can start operating immediately.

"For our hospitality industry, with the boost from Victorian government funding, we've waived the fees for these permits and are now working through improvements in our public areas to accommodate outdoor dining as well as the development of campaigns to support our local businesses.

"We are lobbying the Victorian government and have had discussions with departments about the easing of restrictions in regional, COVID-free areas like ours for consideration of our unique position on the border and allowing our venues, particularly our larger venues, to operate on a level playing field with the Albury businesses."

AW Commercial Real Estate agent Corey Finlay said there was still strong interest level on the sale and leasing front in Wodonga despite lingering impacts of COVID.

"The investor market is quite strong and there's good interest from investors looking for property with a tenancy in place," he said.

"In the dealings we've had landlords, where they can, have been trying their best to assist with tenancies in place in an attempt to get to the other side.

"But it's been difficult, no doubt."