KEY TAKE OUTS
- Eligible commercial and residential landowners may be entitled to receive a reduction in land tax payable for 2020 where they have provided a reduction in rent to a tenant due to COVID-19.
- These measures will provide relief to eligible landowners by reducing land tax payable for 2020 by up to 25%.
- Eligible landowners may also defer their land tax payments by up to three months.
The NSW Government has introduced land tax relief measures to landowners who provide a reduction in rent to tenants who are experiencing financial hardship due to COVID-19.
What land tax relief is available?
If eligible, landowners may be entitled to one of the following relief measures:
- The reduction of up to 25% of their 2020 tax liability; or
- A three-month deferral of their outstanding land tax payments.
If landowners have not completed payment of their land tax for 2020, the relief will reduce or offset the amount left to pay. If landowners have already paid their land tax for 2020, the reduction can be refunded.
Eligibility criteria for land tax relief
The land tax relief measures are available when:
- Landowners are leasing land to a commercial tenant who has an annual turnover of up to $50 million, or a residential tenant;
- The tenant is in financial distress as a result of COVID-19;
- Landowners reduce the rent of the affected tenant for any period between 1 April 2020 and 30 September 2020;
- The rent reduction is not be required to be paid back at a later date; and
- The land tax is directly related to the property for which the rent has been reduced.
What is considered financial distress?
A commercial tenant is considered to be in financial distress where there is a reduction in turnover compared to a previous comparable period of 30% or more.
A residential tenant is considered to be in financial distress where there is a reduction in household income of 25% or more.
How to apply?
Landowners can apply for the land tax relief through the Service NSW website.
ABOUT CHRISTINE GUIRGUIS:
Christine Guirguis is a Senior Lawyer within our commercial and dispute resolution team. She has experience in acting for small to medium-sized businesses and individuals in a range of commercial areas including employment, leases, shareholding, construction law, dispute resolution and commercial litigation.
Christine is committed to providing her clients with accurate and objective advice in plain English, ensuring that her clients have a clear understanding of their legal entitlements and are able to make well-informed decisions.
For further information please don’t hesitate to contact:
This blog is merely general and nonspecific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.