NSW landlords granted $440 million in tax concessions for reducing small business rents during coronavirus
Landlords in NSW will be granted substantial tax relief for passing on reductions in small business rents during the coronavirus pandemic.
The New South Wales government has started the ball rolling on the commercial tenancy relief measures outlined by National Cabinet, announcing $220 million in tax concessions for commercial landlords that slash rent for small business tenants.
Treasurer Dominic Perrottet unveiled the funding on Monday, saying landlords will be offered concessions — as either rebates or waivers — on up to 25% of their 2020 land tax liability for delivering rent relief to small businesses in the state.
Landlords that have yet to pay their land tax bill in NSW this year will also be offered a three-month deferral, provided they extend rent relief to SMEs.
A further $220 million has been outlaid for residential landlords who pass on rent relief, bringing the total value of financial measures for lessors in the state to $440 million.
“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,” Perrottet said in a statement on Monday.
“I thank the many landlords who are already supporting their tenants through this period and the banks for showing flexibility with deferring loan repayments — we are all in this together and need to work together.”
More rent relief on the way
The NSW measures are the first look at how the Morrison government’s mandatory code of conduct for commercial tenancies during the COVID-19 pandemic will actually work in practice, following weeks of small business uncertainty about rent bills.
The mandatory code, unveiled earlier this month, will require landlords to grant rent waivers and deferrals to SME tenants eligible for the JobKeeper wage subsidy scheme, and will ban or freeze several other fees and penalties associated with commercial lease arrangements.
It reflects the Prime Minister’s preference that landlords and tenants negotiate coronavirus arrangements themselves, allowing for bespoke agreements that recognise varying individual circumstances, while the code is intended to address typical power imbalances between SMEs and property owners.
State and territory governments are responsible for administering the mandatory code state-by-state, including mediation services for cases where agreements fall through or cannot be reached.
The NSW Small Business Commission will be given $10 million to bolster its ranks to deliver increased mediation and advisory services related to the code.
But tenants not eligible for JobKeeper payments won’t be covered by the code, the Treasurer confirmed.
“If your circumstances have not significantly changed you need to fulfill the terms of your existing agreement,” Perrottet said.
Other states and territories across Australia are expected to unveil their own plans for legislating the mandatory code in the coming weeks, with all having agreed to the plan in National Cabinet meetings already.
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