COVID-19: NSW land tax relief measures for 2020
On 13 April 2020, the New South Wales (NSW) Treasurer announced a $440 million land tax break to support tenants and landlords. This announcement builds on the NSW Government’s commitment to legislate the National Cabinet’s Code of Conduct for commercial and residential leasing.
The Code of Conduct NSW will include the following key measures during the COVID-19 lockdowns:
- Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19, by applying the leasing principles in the Code
- There is now a ban on the termination of a lease for non-payment of rent
- There is a freeze in rent increases
- There is now Government supported mediation and advisory services.
To support the above, a land tax break in NSW will also apply where the tenant has suffered financial distress (see conditions in table below) as a result of the COVID-19 pandemic.
The relief will provide landlords with up to 25% waiver of the 2020 calendar year land tax liability on a property by property basis, and a further three month deferral of any remaining land tax payable, but only if the landlord passes the benefit of the concession on to their tenants.
Revenue NSW has summarised these rules on their COVID-19 webpages, and the main requirements are set out in the summary table below. We note that the NSW Government has yet to release legislation giving effect to land tax changes, so the summary table below is subject to further details becoming known.
| EFFECTIVE FROM | CONDITIONS | BENTLEYS COMMENT | |
|---|---|---|---|
| LAND TAX WAIVER AND DEFERRAL | |||
| 25% waiver of 2020 land tax liability Three month deferral on remaining land tax liability | Immediate effect – i.e. applies for the 2020 land tax year | Landlord leases land for business or residential purposes subject to land tax Commercial tenants max turnover $50m Tenant must be able to demonstrate: • For commercial tenants – 30% drop in revenue • For residential tenants – 25% drop in household income as a result of COVID-19 pandemic Tenant rent reduced by land tax reduction Applied on a property by property basis | Landlords will need to make an application to waive/defer land tax liabilities for 2020. Revenue NSW will announce application process and required supporting information shortly. Expected information may include: • BAS statements from tenant • Letter from accountant • Old and revised tenancy agreements to show rent reduction |
Further details can be found here:
- Revenue NSW: NSW Government offers $440 million land tax break to support tenants and landlords (external website)
- Treasury NSW: COVID-19 (Coronavirus) and land tax (external website)
For an overview of all Australian fiscal support measures – at federal, state, and territory levels – visit Bentleys’ COVID-19 tax summary update.
Please contact your local Bentleys advisor for further information. We are doing everything we can to help businesses come out of this challenging time in good shape.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.
COVID-19: A summary of Australia's tax measures
The governments of Australian states and territories have also released independent stimulus packages. For an overview of all Australian measures, click here.
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