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Land Tax Relief due to covid-19

A number of states are providing land tax relief due to the current Covid-19 outbreak. Amongst them are Queensland, New South Wales and Victoria.

Queensland: Three-month rebate of land tax for 2019/20 and a three-month deferral of land tax 2020/21 for property owners who agree to provide rent relief for tenants affected by the coronavirus downturn. The landowner can apply for land tax relief if they meet criteria including:

  • landowner rents all or part of a property to a tenant/s or all or part of a property is currently available for lease and
  • at least one tenant’s ability to pay their normal rent or the landowner’s ability to secure a tenant is affected by the COVID-19 pandemic
  • the landowner provides rent relief to an affected tenant/s commensurate with the amount of the land tax rebate or if the property is unable to be leased, the landowner requires land tax relief to meet their financial obligations (such as debt repayments), and
  • the landowner complies with new leasing requirements, even if the relevant lease is not regulated.

A land tax rebate, if received as a refund, does not need to be declared as income, but will still affect taxable income due to the reduction of the amount of tax deduction. It will not be subject to GST.

 

New South Wales: Land tax concession to commercial landlords who should then pass the savings to their commercial tenants affected by the economic effects of the COVID-19 pandemic. The land tax concession will be available for up to 25% of the landlords’ 2020 calendar year land tax liabilities on relevant properties. A further three-month deferral for any outstanding amount will also be offered to landlords claiming the land tax concession.

Key measures of the government Code of Conduct, which will temporarily be in effect for the duration of the pandemic:

• landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19

• a ban on the termination of a lease for non-payment of rent, and

• a freeze in rent increase.

The policy will apply to business tenants with a turnover of less than $50m and have experienced at least a 30% reduction of revenue as a result of the COVID-19 pandemic.

Similar relief of up to 25% of land tax is also available for residential landlords who reduce the rent of an affected tenant where their household income has dropped by 25%.

Victoria: To encourage landlords to provide rent relief to their tenants, eligible landlords who do so will be eligible for a 25% discount on their land tax, while the remainder of the land tax can be deferred until March2021.

Evictions for non-payment of rent for commercial or residential tenancies will be banned for six months. Similarly, rental increases will also be banned for six months.

For renters facing financial hardship due to COVID-19, a rental assistance fund has been introduced. Eligible renters must have registered their revised agreement with Consumer Affairs Victoria or have gone through mediation. They also need to have less than $5,000 in savings and must be paying at least30% of their income as rent. 

from iknow.cch.com.au