Following the advent of the Retail and Other Commercial Leases (COVID-19) Regulations 2020, which prompts landlords to assist in adopting rent relief for their tenants, the NSW Government has recently introduced a land tax relief system that will act as an incentive for Commercial and Residential Landlords to provide this much needed rent relief for those in financial duress as a result of the current COVID-19 pandemic.
What relief is available?
Eligible commercial and residential landlords will be entitled to a reduction in land tax to the lesser of:
1. the amount of rent reduction provided to the tenant for any period between 1 April 2020 and 30 September 2020, or
2. 25% of the land tax attributable to the parcel of land leased to the tenant.
For those who have not yet paid land tax for 2020, the relief will be applied as a reduction that offsets the amount left to be paid. For those who have paid then the relief will be provided by way of refund.
Further to the above, if you receive a reduction under this program, you will also be able to have your outstanding land tax payments deferred for up to three months.
Who is Eligible?
You are eligible for the land tax relief if:
1. You are leasing a parcel of land to:
(a) a commercial tenant, who has an annual turnover of up to $50 million, or
(b) a residential tenant,
2. the tenant is in financial distress as a result of COVID-19,
3. you reduce the rent of the affected tenant for any period between 1 April 2020 and 30 September 2020, and
4. for 2020, you have land tax attributable to the parcel of land leased to that tenant.
Financial Distress is defined as:
1. Commercial tenants who have had a reduction in turnover compared to a previous comparable period of 30%,
2. Residential tenants who have had a reduction in household income of 25% or more.
The applicant seeking land tax relief is responsible for verifying that the tenant is in financial distress.
How to apply for the land tax relief?
To apply you will need to head to the Revenue NSW website and complete the application provided. Proof of identity of the applicant will be needed to complete the application.
If you have any questions in relation to this article, feel free to contact Wade Thomas on wthomas@marsdens.net.au or Ben Wong on bwong@marsdens.net.au or by phoning 02 4626 5077.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
