Tax relief for landlords – State & Territory updates

The State Governments have introduced land tax relief for landowners that have been affected by COVID-19 as a result of rent relief provided to tenants. These concessions are summarised below.

Updated 5 May 2020

Click below to select a State or Territories update:

• Australian Capital Territory
• New South Wales
• Northern Territory
• Queensland
• South Australia
• Tasmania
• Victoria
• Western Australia

Australian Capital Territory

What relief is available?

• Land tax credit (up to a limit of $1,300 per quarter) to cover 50% of the rental reduction of privately rented properties (applicable for residential landlords)
• Commercial rates rebate of $2,622 for commercial property owners.

What is the eligibility criteria?

Residential land tax credit

• Residential landlords that have provided rent relief to the affected tenant/s in accordance with this scheme
• Evidence will need to be provided to prove the eligibility criteria is satisfied and a copy of the tenancy agreement in operation as at 1 March 2020 and evidence of the new rental arrangement.

Commercial rates rebate

• Rebates will be automatically applied to commercial properties with an average unimproved value (single property or unit) of less than $2 million.

Rent relief required to be provided to tenant

• Residential landlords – at least 25% in rent relief must be provided to the tenant to receive the land tax credit
• Not applicable for commercial rates rebate.

Timing for relief

Available for up to six months from new arrangement.

How to access the concession

• Click here to access the Land tax credit application
• The commercial rate rebate will be automatically applied to assessments.

Other concessions if you don’t meet the eligibility criteria

If you are having trouble paying your commercial rates, arrangements can be made by contacting [email protected].

Click here to view the ACT Governments page regarding COVID-19 relief.

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New South Wales

What relief is available?

• Reduction of the 2020 land tax liability by the lesser of:
  • the amount of rent reduction provided to a tenant for any period between 1 April 2020 and 30 September 2020
  • 25 per cent of the land tax attributable to the parcel of land leased to that tenant
• Deferral of balance for three months.

What is the eligibility criteria?

Landlords must:

• Have a land tax liability in 2020
• Own land that is being used for business or residential purposes
• Be leasing property on that parcel to a residential tenant – or a business tenant with annual turnover of up to $50 million – who can demonstrate financial distress resulting from the COVID-19 outbreak
• Reduce the rent of the affected tenant by at least as much as the tax reduction.

Financial distress is considered to be:

• For commercial tenants – a 30% drop in revenue due to COVID-19 pandemic
• For residential tenants – a 25% drop in household income due to COVID-19.

This must be shown through supporting documents such as BAS statements or a letter from an accountant.

Rent relief required to be provided to tenant

Landlords must reduce the rent of the affected tenant by at least as much as the land tax reduction.

Timing for relief

No information regarding timing as of yet.

How to access the concession

To be advised.

Other concessions if you don’t meet the eligibility criteria

Several options available such as applying for an installment plan and leniency for late payments.

Click here to view the NSW Governments media release regarding COVID-19 and land tax.

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Northern Territory

Land tax is not charged by the NT Government, as such no relief measures have been announced.

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Queensland

What relief is available?

• A land tax rebate reducing land tax liabilities by 25% for eligible properties for the 2019-20 assessment year
• A waiver of the 2% land tax foreign surcharge for foreign entities for the 2019-20 assessment year (no application required)
• A 3-month deferral of land tax liabilities for the 2020-21 assessment year. (no application required).

What is the eligibility criteria?

For landlords currently leasing to tenants:

• The ability of one or more tenants to pay their normal rent is affected by the coronavirus (COVID-19) pandemic
• You will provide rent relief to the affected tenant(s) of an amount at least proportionate to the land tax rebate
• You will comply with the leasing principles even if the relevant lease is not regulated.

For landlords with available properties without tenants:

• All or part of your property is available for lease
• Your ability to secure tenants has been affected by the COVID-19 pandemic
• You require relief to meet your financial obligations
• You will comply with the leasing principles even if the relevant lease is not regulated.

Rent relief required to be provided to tenant

At least 25% in rent relief must be provided to the tenant.

Timing for relief

The land tax rebate can be applied for up to 30 June 2020.

How to access the concession

• To apply for the land tax reduction login or register for OSR Online services and follow the application steps
• The 3-month deferral of land tax liabilities and foreign surcharge waiver will be automatically applied to assessments.

Click here to view the Queensland Governments page regarding COVID-19 and land tax.

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South Australia

What relief is available?

• Reduction of up to 25% of the land tax payable on a parcel of land in the 2019-20 land tax year
• A six month deferral of third quarter land tax installment for 2019-20 land tax assessment
• A three month deferral of fourth quarter land tax installment for the 2019-20 land tax assessment
• Increase of the previously announced Land Tax Transition Fund relief (available to eligible taxpayers whose land tax bill will increase as a result of the changes in the aggregation of land commencing from 1 July 2020) from 50% to 100% of the increase in an eligible taxpayer’s 2020-21 land tax assessment of up to $50,000

What is the eligibility criteria?

Land tax reduction:

• The land is used for residential or non-residential (commercial) purposes;
• The land is being leased to either (i) a residential tenant, or (ii) a non-residential (commercial) tenant with annual turnover of up to $50 million, who has been financially impacted as a result of the COVID-19 pandemic; and
• The land tax is directly related to the land for which the rent has been reduced.

Financially impacted is considered to be:

• For non-residential (commercial) tenants – a 30% drop in revenue due to COVID-19 and are eligible for the Australian Government’s JobKeeper Payment
• For residential tenants – financial hardship due to COVID-19. Further information will be available as part of the application process.

For landlords with available properties without tenants due to COVID-19:

• Demonstrate that the land was leased to 30 March 2020, but has since been vacant due to the impact of COVID-19.

Deferral:

You are a business or individual paying land tax quarterly in 2019-20.

Rent relief required to be provided to tenant

At least 25% in rent relief must be provided to the tenant.

Timing for relief

• Applications for the land tax reduction relief will be open until the end of June 2020.
• No application process required for the land tax deferral. Businesses and individuals will be sent their land tax notices of assessment as usual, with information provided on how the deferral will be administered.

How to access the concession

• Details to apply for the land tax reduction will be available soon on the Revenue SA website.
• No application process required for the land tax deferral.

Click here to view the South Australian Governments page regarding COVID-19 relief.

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Tasmania

What relief is available?

• Land tax waiver (100%) for the 2020-21 financial year
• Outstanding land tax for 2019-20 financial year may be deferred until 30 June 2020 without penalties.

What is the eligibility criteria?

Only for commercial property and business owners where:

• The business owner is liable for the land tax
• Can demonstrate that their business operations have been affected by COVID-19.

Rent relief required to be provided to tenant

Not applicable.

Timing for relief

No information provided as of yet. Applicable for the 2020-21 financial year.

How to access the concession

To be advised.

NB: aimed at business owners as opposed to landlords.

Click here to view the Tasmanian Governments page regarding COVID-19 relief.

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Victoria

What relief is available?

• 25% reduction on the property’s 2020 land tax

• Option to defer the balance of the assessment until 31 March 2021.

What is the eligibility criteria?

To be eligible, landlords must demonstrate that:

• All or part of their property is rented or all or part of the property is currently available for lease
• That at least one of the tenant’s ability to pay their normal rent or their ability to secure a tenant is affected by the COVID-19
• They have provided rent relief to the affected tenant/s in accordance with this scheme OR unable to secure a tenant because of COVID-19.

Emergency legislation was passed by the Victorian Parliament on Thursday April 23 to reform residential and commercial tenancy laws, it is now awaiting royal assent. This legislation includes provisions preventing eviction of tenants and the creation of a fast tracked dispute resolution process for tenants and landlords. Refer to our update on the Mandatory Code of Conduct.

Additionally, tenants must:

• Provide evidence of the above and that the tenant is eligible for the JobKeeper Payment
• Have an annual turnover of up to $50 million (only relevant for commercial landlords).

Rent relief required to be provided to tenant

Landlords must pass on an amount at least equivalent to the 25% reduction to their tenants.

Timing for relief

Eligible landlords will be able to apply for the land tax reduction from Friday 1 May 2020.

How to access the concession

• Eligible landlords will be able to apply for the land tax reduction through My Land Tax from Friday 1 May 2020.
• Landlords that are not already registered for My Land Tax will be required to do so to apply for the land tax relief.
• Once logged into My Land Tax landlords must select ‘COVID-19 land tax relief for eligible landowners’ on the dashboard and apply for the relief in respect of each eligible property owned.
• Landlords must answer all questions in the application form and upload required documentary evidence, note that this process must be completed in respect of each eligible property.
• Once the applications is submitted it will be reviewed by the state revenue officer and if allowed the payment of any outstanding land tax from 2020 assessment up to March 2020 will be automatically deferred.

Please refer to the SRO website for more information regarding the process.

Other concessions if you don’t meet the eligibility criteria

2020 land tax deferral is available for land owners that have at least one taxable non-residential property with total taxable landholdings below $1 million.

Click here to view the Victorian Governments response to frequently asked questions regarding the COVID-19 stimulus.

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Western Australia

What relief is available?

• Remission of penalty tax
• Alternative interest free tax payment arrangements.

What is the eligibility criteria?

One must demonstrate their financial circumstances have been directly or indirectly impacted by COVID-19.

Rent relief required to be provided to tenant

Not applicable.

Timing for relief

Available from 23 March 2020.

How to access the concession

• To apply for the land tax payment arrangements click here

Click here to view the Western Australian Governments page regarding COVID-19 relief.

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Contacts