NSW Government: $440 million land tax relief package
Treasurer Dominic Perrottet says NSW commercial tenants significantly impacted by COVID-19 will have greater protection from evictions with the State Government set to enact the National Cabinet Code of Conduct as part of a $440 million land tax relief package.
The measures will apply to commercial leases where the tenant is in financial distress due to COVID-19, including but not limited to shops, cafes, gyms, hairdressers, restaurants, offices, warehouses and industrial sites.
The land tax relief is expected to be divided approximately 50-50 with around $220 million going to the commercial sector and a further $220 million expected to benefit the residential sector.
Commercial landlords will be offered the land tax concession if they pass the savings on to tenants through a rent reduction.
Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 (calendar year) land tax liability on relevant properties. A further land tax deferral for any outstanding amounts for a three-month period will also be offered to landlords who claim the land tax concession.
The Government will give effect to the Code of Conduct, which will operate for a temporary period during the pandemic, and include the following key measures:
- Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code.
- A ban on the termination of a lease for non-payment of rent.
- A freeze in rent increases.
To facilitate these changes, and deliver increased mediation and advisory services to commercial parties, the NSW Small Business Commission will be bolstered with extra staff and an injection of $10 million from the $1 billion Working for NSW Fund.
The policy will apply to business tenants with a turnover of less than $50 million that experience a 30 per cent (or more) reduction in revenue as a result of the COVID-19 pandemic, in line with the Prime Minister’s announcement on 7 April.
This will include any business with annual turnover of less than $50 million who is eligible for the Commonwealth’s JobKeeper program.
Prime Minister Scott Morrison released the National Cabinet Mandatory Code Of Conduct – SME Leasing Principles During COVID-19 on Tuesday, 7 April. The NSW Government will seek to give legal effect to the code as soon as possible.
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