Queensland, NSW move to offer landlords and tenants relief from coronavirus downturn

In Queensland landlords with a vacant property currently available for lease are also eligible to apply for the discount.

That state has also announced it will defer the introduction of the foreign land tax surcharge – a surcharge for foreign companies that own land.

Both states will also offer a three-month land-tax deferral for the coming tax year.

To be eligible to have the land tax savings passed on by their landlord, NSW businesses will need to have a turnover of $50 million or less and have seen a reduction of at least 30 per cent in revenue as a result of COVID-19. Queensland has not specified the eligibility criteria for commercial tenants.

The Property Council of Australia welcomed the Queensland and NSW governments’ announcements.

Jane Fitzgerald, the NSW executive director, said the land tax relief included in the NSW package would help commercial property owners help tenants over the months ahead.

“But we must avoid a situation where too much of the burden of delivering relief for tenants is expected to be carried by commercial property owners, which include many smaller investors and businesses themselves,” she said.

Responding to code of conduct

The changes come in response to the federal government’s announcement of the code of conduct for commercial landlords and tenants last week.

In addition to the land tax reduction, the NSW government announced on Monday that it would also institute a ban on the termination of a lease for non-payment of rent and place a freeze on rent increases.

NSW Treasurer Dominic Perrottet said the land tax reduction should act as an incentive for landlords and tenants to reach an agreement under the mediation process mandated by the code of conduct.

“This provides a way forward for tenants and landlords so they can reach an agreement during this difficult period and includes an incentive in the form of a land tax reduction,” Mr Perrottet said.

The code will bind both landlords and tenants, who have a turnover of $50 million or less and are eligible for the $130 billion JobKeeper program of benefits, to certain imperatives.

These will include landlords not being able to terminate leases or draw on their tenants’ security, tenants honouring their leases, and landlords reducing rent proportionate to the trading reduction of the tenant’s business.

Under the code waivers should make up at least 50 per cent of any rent relief provided with deferrals to make up the balance under the code.

Mr Perrottet said rent waivers and reductions would only be applied to those NSW businesses significantly affected by COVID-19 that meet the eligibility criteria.

“If your circumstances have not significantly changed you need to fulfil the terms of your existing agreement.” Mr Perrottet said.

Arrangements between tenants and landlords under the code will be overseen by a mediation process and the NSW government announced that it would be bolstering  the NSW Small Business Commissioner to handle negotiations in that state.

Other states to make announcements 

Victorian Premier Daniel Andrews hinted that rental relief measures were being prepared for that state in a press conference held on Monday.

He did not give a precise indication of when that announcement would happen or what it would contain, only saying “we’ll be announcing that soon”.

In South Australia businesses paying land tax on a quarterly basis are already able to defer payment of their third and fourth quarter instalments for up to six months under measures announced prior to the code of conduct.

More state announcements are expected this week as governments take steps to reflect the code of conduct in legislation.