The NSW Government has introduced measures to provide relief to residential and commercial landowners who have provided rental reduction to tenants experiencing financial distress due to COVID-19.
The 2020 Land Tax COVID-19 Relief Scheme acts both as an incentive for landlords to offer their tenants waivers and rental deduction while also supporting landlords by reducing their land tax payable for 2020, by up to 25 per cent, for a taxable parcel of land where rent relief has been given to the tenant who occupies that land.
Eligible landowners are also able to defer land tax payments up to 3 months.
Eligibility for Land Tax Relief
To be eligible for the land tax relief scheme, you must be leasing property to:
- A commercial tenant with an annual turnover of less than $50 million who has lost 30% or more turnover due to COVID-19; or
- A residential tenant who has lost 25% or more of household income due to COVID-19
You must have also:
- reduced the rent of the affected tenants for any period between 1 April 2020 and 30 September 2020;
- provided the rent reduction without any requirement to be paid back (i.e. not a rent deferral- must be reduction or waiver without a right to re-claim the lost rent); and
- the land tax must be attributable to that particular parcel of land that is leased to the impacted tenant (i.e. the relief must relate to the land leased to the tenant and not another property owned by you).
Relief available for Landlords -Land Tax Relief
The relief available under the scheme to landlords is a reduction (the lessor of):
- the amount of rent reduction provided to a tenant for the period between 1 April 2020 and 30 September 2020; or
- 25% of the land tax attributable to the parcel of land leased to that tenant.
If you have already advanced payment of land tax for the 2020 year, the eligible reduction can be refunded to you.
Where land tax has not been paid yet the relief will reduce or offset the amount still owing to the Commissioner. Any successful application under the scheme automatically defers remaining land tax payments for 3 months without interest.
Required Documents/Details for an Application
- A MyService NSW Account – the application is only available through Service NSW.
- Two proof of identity documents (i.e. Australian driver licence, Medicare card, Australian passport, Australian birth certificate etc)
- your land tax client ID & correspondence ID
- Electronic Funds Transfer (EFT) details
- evidence of your rental reduction. i.e. copies of tenancy agreements proving rental reduction; rental ledgers or a letter from your property manager
- evidence of your tenants’ financial distress due to COVID-19. i.e. their financial statements or a letter from your tenants’ accountant or property manager.
Rostron Carlyle Rojas Lawyers is here to help
We are committed to helping our clients navigate the recent changes the way business is conducted as a result of COVID-19. If you require assistance with accessing the various government stimulus packages or are now unsure if your business will survive the pandemic, contact us today. Our qualified legal advisers are here to help.
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