Prior to COVID rental markers were on the rise with low development there was a high demand; making it a solid investment. However, with COVID still at large property owners are unsure of their current and future conditions.
The New South Wales Government set in place some significant changes laid down by the Cabinet, which are now extended until the 31st of December 2020. These include the following temporary adjustments to the Residential Tenancies Act:
The Victorian Government has set in place specific laws in light of the Coivid19 Act. Passed by the Cabinet for 6 months, these temporary laws will stand in Victoria until 29th March 2021. These temporary laws set due to COVID are:
The Queensland Government implemented the Cabinet agreed 6 months moratorium for rent arrears due to COVID. These temporary protections for Queensland tenants and landlords have changed from 30th September 2020. The 6-month eviction halt and proposals set in place to aid won't be applicable after 29th September 2020 - covering the following:
The protections that will continue until 31st December 2020 include:
The Tasmania local government has decided to extend the emergency state for residential tenants until the 1st of December 2020. With COVID still at large, the protections that were initially put in place at the end of March 2020 are still in play. Under the COVID-19 Disease Act 2020 the protections are as follow:
A law was passed in March titled COVID-19 Response Act 2020 offering tenants some relief. In light of the recent developments, the Western Australian Government has decided to extend the relief period until 28th March 2021. The main laws set in place that impact landlords the most are:
These laws apply to residential tenancies that include park homes, boarders, lodgers, and public & government housings.
The impact of COVID can still be felt, due to which there has been a shift in the rental market. The South Australian Government passed a COVID-19 Emergency Response Act 2020, making temporary changes to residential tenancy law. The law set in place cuts back on the impact of homelessness, and is said to continue on until 6th February 2021 - or 28 days after COVID-19 ceases to exist in SA. The main changes included in the Response Act are:
The laws set in place do not mean tenants can stop paying rent, along with water, electricity, and other bills. Or that the tenant will not be required to repay due rent. The landlords and tenants are expected to work together and come to a reasonable arrangement. If you are unable to reach an agreement you can dispute the case in front of the SACAT.
The national code for commercial leasing during COVID-19 was set by the PM, offering every detail needed to work around the pandemic. The cabinet drew up a set of principles based on commercial leasing.
These temporary laws passed by the Cabinet and Premiers and Territories Chief Ministers will be set in all states - They include:
Local governments in Australia are now offering land tax relief for landlords in hopes to help them float during the emergency period. Tax relief is being offered to non-residents and residential landlords. The relief is divided into two periods for both residential, commercial residential and non-residential landlords.
Initially, the tax reduction relied on the relief the landlord is offering tenants impacted by COVID-19. Or rent the landlord has lost from March 30th, 2020 to October 30th, 2020 (covering the first period).
The first relief application period closed on 30th September 2020, and the expanded (second period) tax relief is offered to landlords that offer their tenants relief due to COVID-19. Covering the period from 31st October 2020 to 30th April 2021. - Applications will open soon.
One of the main criteria that makes landlords eligible for land tax relief are those who reduced rents and offered some relief to tenants. The amount the landlord let go will be the same as the amount of land tax relief they are offered. Additionally, a landlord is eligible for tax relief if their property remained untenanted due to COVID - and for a specific period of time.
Landlords can claim a 25% cut on the 2019-20 land tax on eligible property, while the maximum reduction rate goes up to 50% on 2019-20 land taxes.
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Note: Each period is assessed separately, and the landlord must meet the criteria set for the said period including:
You have offered rent relief to your tenant, and your tenants meet the emergency criteria.
Or if your property has been vacated due to COVID and you have lost rent.
While the maximum tax relief offered by the Government is 50%, it is offered in two sections. 25% covering each period.
The landlord may receive the full amount they have relieved the tenants of or lost due to vacant tenancy between March 30th, 2020, and October 30th, 2020. There is a chance you may get a lower cut on your land tax based on the rent relief you offered, or if your tenant meets relief requirements.
The landlord may receive the full amount they have relieved the tenants of or lost due to vacant tenancy between October 31st, 2020, and April 30th, 2021. There is a chance you may get a lower cut on your land tax based on the rent relief you offered, or if your tenant meets relief requirements.
Once you start working on your form you will receive specific evidence requirements based on your situation. Meaning each situation may require a set of evidence. Which can include, but are not limited to:
Landlords who haven't paid the complete amount of their 2019 to 2020 taxes - Will be offered relief in the form of a credit against an outstanding land tax from 2019 to 2020.
Landlords who have paid the full land tax for 2019 to 2020 - Will be offered relief in the form of a credit against their future tax liabilities or even as a refund.
You can choose the way you wish to receive your relief. Once your application is approved you will receive credit or cash based on your request.
Landlords who choose a refund are required to state their account details on the application form. When choosing a refund by cheque, it will automatically be posted to your address on record.
Yes, you are eligible for relief up to the amount you have offered as a relief to your tenant. The maximum cap is 25% of relief, anything more than that will still be capped under 25%.
For instance, if you offered a once-off rent of $250, and your land tax is $2000. Then you can claim a relief you provided. As $250 is less than 25% you are eligible for a cut of $500 on your $2000.
No, only the relief provided in the specific period will be counted as eligible evidence. Unfortunately, if you have missed the application deadline for period 1 there is no way you can reclaim that amount.
If your tenants do not face financial hardship due to the pandemic you cannot apply for relief. Additionally, you are legally within your rights to stand your ground on the rent they were paying you before the emergency period was enabled.
Commercial leasing that offered relief to their tenants can now file for relief while paying property taxes. A system enforced by the government to help them keep their household afloat during the pandemic.
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Note: Properties that are being developed for sale are not eligible. Unless and until you are conducting an active business on the property. Development or construction work does not qualify as an active business.
The relief offered is based on a number of factors, along with its range. Once you meet the criteria, then you will receive a 25% relief in land tax based on a number of factors based on your unique situation.
The evidence required is based on the situation, which will start to appear as you fill in your criteria. The general evidence required can be, but is not limited to:
The application period starts soon and will close on 30th April 2021.
Landlords who haven't paid the complete amount of their 2019 to 2020 taxes - Will be offered relief in the form of a credit against an outstanding land tax from 2019 to 2020.
Landlords who have paid the full land tax for 2019 to 2020 - Will be offered relief in the form of a credit against their future tax liabilities or even as a refund.
You can choose the way you wish to receive your relief. Once your application is approved you will receive credit or cash based on your request.
Landlords who choose a refund are required to state their account details on the application form. When choosing a refund by cheque, it will automatically be posted to your address on record.
If your business is not eligible for JobKeeper after 28th September 2020, then you are not eligible for relief.
To be eligible for the relief your business turnover from 2018 to 2019 should be less than $50 million. However, if the business set on the property is a franchise, then the turnover for that particular franchise must be less than $50 million.
The code is applicable to all commercial leases which include retail, industrial, and office leases - where the tenant:
Suffers from financial stress or hardship caused by the pandemic - As defined by the JobKeeper Program and Commonwealth Government. Additionally, the tenant has an annual turnover is less than $50 million.
In such a state landlords have two main financial relief choices - These choices can help you keep the ball rolling for the time being. Once secured you can begin negotiations with your tenants.
The first step is to apply to your bank for a deferment in your mortgage repayments. Or you can get them partially deferred for six months. Most banks in Australia are offering measures as a relief to help support customers facing financial hardship during COVID. That being said, the bank needs to make its money back. Meaning, the interests, and repayments will show on your loan plan. The best way to ensure relief from your bank is by offering them proof that you have lost rental income.
Double-check to confirm if your landlord insurance covers the rental loss. Under these unusual circumstances, a loss of rent is covered by insurance companies for a certain period of time. However, there is a good chance that insurance policies do not cover lost income in the current climate (Where tenants cannot be evicted). Fortunately, most Australian insurance companies are standing firm on their original policies.
Note: Newer complexes may be covered under rental guarantee. This can be found on your sales contract.
The best place to start right now is negotiations. Rather than sitting back and wondering what might come your way, start by acting on the information at hand. If you are facing issues due to loss of rental income then start by talking to your tenant(s) one on one.