Government acts to support commercial tenants and landlords, including $440 million in tax relief
New regulations published in NSW will give immediate effect to the NSW Government’s COVID-19 rental relief measures, reflecting the National Cabinet’s Code of Conduct agreed to by all states.
Minister for Finance and Small Business Damien Tudehope and Treasurer Dominic Perrottet said the changes will support and guide tenants and landlords in negotiating agreements.
They are part of the NSW Government’s package of support for tenants and landlords which includes up to $440 million in land tax relief announced on April 13, to be split approximately 50-50 between the commercial and residential sectors.
“This is about adopting a national framework in NSW so agreements can be reached between parties and more businesses stay in business and people stay in jobs,” Mr Tudehope said.
“These new regulations require landlords to negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the National Code of Conduct.”
Mr Tudehope said the regulations - which also apply to commercial leases - would provide a clear way forward for tenants and landlords to reach agreements.
“We’re taking action to provide certainty for landlords and tenants and enshrine into law the measures needed right now as agreed by the National Cabinet. If there is more the government needs to do, we will address those gaps where possible.”
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.
Regulations relating to commercial leases were expedited under amendments passed by the NSW Parliament in March, which allow the government to make laws that are reasonable to protect the health, safety and welfare of lessees or tenants during COVID-19.
New regulations to assist landlords and tenants in the residential sector were also published last week by the Minister for Better Regulation and Innovation.
Mr Perrottet said land tax relief would be available within weeks, with landlords also able to access a further land tax deferral for any outstanding amounts for a three-month period if they’ve claimed the land tax concession.
“Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 land tax liability on relevant properties so long as they pass on the full savings in the form of a rent reduction to their tenants,” Mr Perrottet said.
The commercial lease 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.
If circumstances have not significantly changed, tenants still need to fulfil the terms of their agreements.
For residential tenancies, households must show they have suffered a loss of income equal to or greater than 25 per cent due to COVID-19 and are struggling to make rental payments.
The National Cabinet Mandatory Code Of Conduct - SME Leasing Principles During COVID-19 was released by Prime Minister Scott Morrison on Tuesday 7 April 2020.
It is expected eligible landlords will be able to apply for land tax rebates from Service NSW from Monday 4 May 2020.
More information is available via Service NSW.