Assisted by Francesca Zappia
Following on from our previous commercial property blog on 'COVID-19 and Leases - The Next Chapter in Rental Relief', we can now at least say, that there have been some changes regarding the COVID-19 rental relief regime. In the recent 2020-21 State Budget, the Government announced many changes to the scope of commercial property which allow for greater relief and flexibility to support both landlords and tenants during the unprecedented times of COVID-19.
Rent Relief - What has changed?
- The major change on the ability to apply for rental relief is the extension of the Retail and Other Commercial Leases (COVID-19) Regulation (NSW) from 25 October 2020 to 28 March 2021. This supports tenants in that they are now able to claim rental relief for a further five months over the original repeal date.
- Tenants in retail leases will meet the requirements for rental relief on the basis that they have a turnover of less than $5 million and a drop of at least 30 per cent in their December quarter turnover.
- For commercial tenants with an annual turnover of more than $50 million, there is no rent reduction available.
Land Tax - What has changed?
- Landlords have the ability to apply for land tax relief until 28 March 2021 under the Retail and Other Commercial Leases (COVID-19) Regulation (NSW). The extension allows a balance between reduced land tax and rental relief whilst supporting continued tenancy.
- Landlords who have provided rent reductions between April 2020 and March 2021 will be eligible to apply for a 25% reduction in their land tax for 2021.
- Rent Deferrals are not the same as providing a rent reduction, given that the rent is paid back "or be it" at a later date. Therefore, deferrals are not included in this land tax relief regime.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.