Australia: NSW Government releases further information in relation to COVID-19 support

The New South Wales government has released some further information in relation to certain relief announced as part of their economic support package on 13 July 2021 for businesses and individuals impacted by the extended lockdowns.

Land Tax Relief

Landowners can receive a reduction of up to 100% of land tax payable for the 2021 land tax year if they provide a rent reduction to an eligible tenant between 1 July 2021 and 31 December 2021. The land tax reduction will be the lesser of:

• the amount of rent reduction provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021, or
• 100% of the land tax attributable to the parcel of land leased to that tenant.

Landowners may be eligible if all of the following criteria are met:

• They are leasing a parcel of land to:
  • a commercial tenant, who has an annual turnover of up to $50 million and is eligible for the Micro-business COVID-19 Support Grant, the 2021 COVID-19 NSW Business Grant and/or the JobSaver scheme, or
  • a residential tenant.
• the tenant is in financial distress as a result of COVID-19. Landowners will need verify that their tenant is in financial distress but broadly, a tenant is considered to be in financial distress where:
  • for commercial tenants, they have experienced a reduction in turnover compared to a previous comparable period of 30%(or more).
  • for residential tenants, they have experienced a reduction in household income of 25% (or more).
• landowners reduce the rent of the affected tenant for any period between 1 July 2021 and 31 December 2021.
• landowners have land tax attributable to the parcel of land leased to that tenant for 2021.
• the rent reduction is not required to be paid back at a later date. If it is provided but is required to be paid back at a later time, it will be considered to be a deferral of rent and will not be considered as a reduction of rent.

Applications for the land tax relief will be available via Service NSW shortly and may be subject to potential compliance review for legitimacy and penalties may apply for false or misleading statements.

Where rent reductions are provided to a residential tenant in financial distress, landlords may be eligible for a grant of up to $1,500 if they are not liable to pay land tax. More information on this grant will be released soon.

At this point in time there is no requirement for landlords to provide rental relief, rather the approach of the NSW Government is to incentivise landlords with grants or land tax discounts in exchange for rental relief.

Residential/ Commercial Leases – other considerations

It should also be noted that the NSW Government has announced that it will introduce a 60 day moratorium preventing evictions of residential tenants affected by the latest lockdown until 11 September 2021.

There is also a requirement for landlords to enter mediation with certain commercial and retail tenants prior to carrying out 'prescribed actions' which include eviction, recovering security bonds and terminating leases. This requirement applies from 13 July to 20 August 2021. This requirement applies to commercial or retail tenants with an annual turnover of up to $50 million who are eligible for the Micro-business COVID-19 Support Grant, the COVID-19 NSW Business Grant and/or the Job Saver Grant. If there is a breach of the lease, an impacted lessee must give the lessor the following information:

• a statement to the effect that the lessee is an impacted lessee,
• evidence that the lessee is an impacted lessee.

This ensures the lessor knows the lessee is an impacted lease and is eligible for these protections.

Payroll Tax

25% ReductionPayroll tax taxpayers whose total grouped Australian wages for the 2021/22 financial year are $10 million or less and have experienced a decline in revenue of 30% or more, will have their annual tax liability reduced by 25%. More information will be provided on this towards the end of August 2021.

Deferred Payments

All payroll taxpayers:

• have the option of deferring their payroll tax payments until 7 October 2021.
• have the option of deferring their payments for the July and August 2021 return periods until 7 October 2021.

Annual Reconciliation

Payroll taxpayers are required to lodge the 2020/21 annual reconciliation by the extended due date of 7 October 2021. However, they will have the option of paying all of their outstanding liability in full or entering into a new Support Payment Arrangement. If taxpayers choose to enter into a 2021 Support Payment Arrangement, they will have the option to include tax payable from the 2020/21 annual reconciliation and any monthly liabilities for the July, August and September 2021 return periods. More information will be provided on this towards the end of August 2021.

Existing 2020 Stimulus Payment Arrangements & Tax Debt Instalment Plans

The due dates for any existing Stimulus Payment Arrangements and Tax Debt Instalment Plan payments in July 2021 remain unchanged and if you are experiencing difficulties in making these payments, please contact NSW Revenue's Payroll Tax team on 1300 139 815 or payrolltax@revenue.nsw.gov.au.

Gaming Machine Tax

As announced on 13 July 2021, gaming machine tax payments for clubs and hotels have been deferred until 21 December 2021 for clubs and until 21 January 2022 for Hotels.Please see the updated due dates for gaming machine tax below:

Hotels

Clubs

You do not need to apply for deferral of gaming machine tax payments. Invoices generated by Data Monitoring Services (DMS) will have the original due date, however Revenue NSW will not debit your account on this date.

Please note that Service NSW are yet to release information on the eligibility requirements for the Micro-business COVID-19 Support Grant, the 2021 COVID-19 NSW Business Grant and JobSaver scheme. We will provide you with an update once this has been released.

If you have any queries, contact your Moore Australia advisor for more information.

The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Please contact your local Moore Australia office to discuss your specific circumstances or case. Moore Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication.