Today, 15 April 2020, the Premier of Victoria, Mr Daniel Andrews MP, announced a substantial $500 million COVID-19 support package for commercial and residential landlords and their tenants, providing valuable land tax discounts and rental relief.
What is on offer?
The package provides:
- $420 million in land tax relief for commercial and residential landlords “if they are involved in a mediation process…where tenants who are experiencing real hardship sit down and broker a partnership (negotiation agreement) with their landlord” to provide rent relief to tenants, being a 25 per cent discount on 2020 land tax and a payment deferral of the balance of 2020 land tax until March 2021. Although this relief is to be available for both residential and commercial properties, in order for commercial landlords to be eligible, the property must be rented to a tenant with an annual turnover of up to $50 million, and the tenant must be eligible for the Commonwealth Government’s JobKeeper Payment.
- $80 million rental assistance fund for residential renters facing hardship due to COVID-19. If, after a discounted rental agreement is reached, the rent continues to represent more than 30 per cent of the residential tenant’s income, that tenant will be considered to be under “financial stress”. In these circumstances, if the tenant earns less $100,000 per annum and has less than $5,000 in savings, the Victorian Government may provide up to $2,000 rental assistance directly to the landlord. Renters will also need to have registered their revised rental agreement with Consumer Affairs Victoria or gone through mediation to be eligible for this rental assistance.
A reminder of further rental assistance previously announced per National Cabinet agreement
This assistance builds on the previously announced National Cabinet agreement which allows for:
- A six-month ban on evictions for residential tenancies, as well as for the non-payment of rent for commercial tenancies involving small and medium-sized business
- A six-month ban on rental increases for residential properties, and for commercial tenancies involving small and medium-sized business
- Rent waivers and deferrals for businesses earning less than $50 million and with a reduction in turnover of at least 30 per cent.
When will this be legislated?
A special sitting of Victorian Parliament is scheduled for Thursday, 23 April 2020, to pass legislation for the announced land tax relief and rental assistance, as well as to introduce the temporary bans on evictions and rental increases. As agreed by National Cabinet, these measures are to take effect from 29 March 2020 for a six-month period.
Further details can be found here:
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.