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COVID-19 Rent Relief and Land Tax

Luke Mitchell ||

In New South Wales, we have been waiting eagerly for the New South Wales government to introduce measures to provide land tax relief in relation to commercial leasing transactions.

Finally, the New South Wales government in the past week has confirmed that a landlord will receive a reduction in their land tax for the 2020 year on the basis of the lesser of the amount of rent reduction provided to a tenant for any period between 1 April 2020 and 30 September 2020, and 25% of the land tax attributable to the parcel of land leased to the tenant.

If a landlord receives a reduction under the above measure, they are also able to have their outstanding land tax payments deferred for up to three months.

Importantly, a landlord is only eligible for this land tax relief if they are leasing a parcel of land to a commercial tenant who has an annual turnover of up to $50,000,000.00, and the tenant is in financial distress as a result of COVID-19.

A tenant is only considered to be in financial distress where, if they are a commercial tenant, they have a reduction in turnover compared to previous comparable periods of 30% (or more). The landlord is responsible for verifying that their tenant is in financial distress.

Also, the rent reduction must not be required to be paid back at a later date. If a reduction in rent is provided that is required to be paid back at a later date, this is considered to be a deferral in rent and will not be considered as a reduction in rent for the purposes of this scheme.

Whether you are a tenant or a landlord and require assistance, please do not hesitate to contact a member of Coleman Greig’s Commercial Property team, who would be more than happy to assist you today.

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