The Victorian State Government has announced that it will be introducing legislation to deal with leasing during the COVID-19 pandemic and will be providing support to Landlords in the form of land tax relief and deferrals. The Victorian Parliament will be sitting on Thursday 23 April 2020 when we expect several different laws to be passed.
Further to our previous article outlining the National Cabinet Mandatory Code of Conduct, the Victorian Government has announced that urgent legislation will be presented to Parliament on Thursday 23 April 2020 to implement the principles set out in the Code. In addition, the legislation will apply similar principles to residential leases. These principles include:
- Temporary ban on evictions
- Rental waivers or deferrals as detailed in the Code
- Pausing rental increases for 6 months
- Providing land tax relief for Landlords (see below)
- Tenants and Landlords who cannot strike a deal over rent reductions will be given access to a fast-tracked mediation with either Consumer Affairs Victoria or the Victorian Small Business Commission.
We also note that the Government has recently announced a rental assistance fund to provide rent relief payments of up to $2000 to Victorians experiencing rental hardship as a result of COVID-19. Strict requirements must be met including the Tenant having less than $5,000 in savings and paying at least 30% of their income in rent.
Land Tax – Relief
As part of the Victorian Government’s economic survival package, Landlords of both commercial and residential property may be entitled to land tax relief. Please see below the eligibility criteria and relief available for commercial and residential Landlords:
A Landlord will be eligible to a 25% discount on land tax and may choose to defer the balance of the assessment until 31 March 2021 if it can prove that:
- all or part of the property is rented or available for lease;
- at least one of the Tenant’s ability to pay normal rent is impacted by COVID-19;
- the Landlord has provided rent relief to the affected Tenant (which must be no less than the amount provided by the 25% land tax discount); and
- the Tenant is eligible for the JobKeeper payment and has an annual turnover of up to $50 million.
Residential Landlords will also have the benefit of a 25% discount on land tax and deferral of the balance if they can meet the same eligibility criteria as Commercial Landlords with the exception of criteria 4 above (i.e. the Tenant does not need to be eligible for the JobKeeper payment).
Applications for relief
You can apply for land tax relief through the State Revenue Office. The first step is to register on My Land Tax at sro.vic.gov.au/mylandtax
The State Revenue Office are setting up the scheme and expect it to be available shortly.
Land Tax – Deferrals
Land owners that own at least one taxable non-residential property (commercial, industrial and non-residential vacant land) and total taxable landholdings below $1 million will be eligible for a deferral of their entire land tax until after 1 January 2021 to be paid in full by 31 March 2021.
The State Revenue Office will be contacting eligible taxpayers and land owners do not need to do anything to apply for a deferral until contacted.
Land Tax – Hardship Relief
The State Revenue Office have also advised that you can apply to them for hardship relief in the event that paying your land tax will cause you to suffer serious hardship. The relief is discretionary and may take the form of remission or postponement of land tax. If the land tax payable is less than $1000 then the Commissioner can make a determination on whether the hardship relief is to apply. If the land tax payable is in excess of $1000 then the Land Tax Hardship Relief Board will determine the application.
We will provide you with further updates once Parliament has considered the legislation on Thursday 23 April 2020. If you have any queries in the meantime, please do not hesitate to contact us.