Covid-19: Further Update on Land Tax

Covid-19: Further Update on Land Tax

You may recall our earlier publication advising that the NSW Government had provided some relief for the commercial and residential leasing sectors by way of a land tax concession of up to 25% and a deferral of outstanding land tax for a 3 month period subject to meeting the qualifying criteria.

As you have no doubt noticed during this Covid-19 Pandemic the restrictions and relief published by the Government are ever changing including adjustments to the relief available to the commercial and residential leasing sectors which are discussed below.

The reduction in land tax payable will now be the lesser of:
- the amount of rent reduction the Landlord has provided to the Tenant for any period between 1 April 2020 to 30 September 2020; or
- 25% of the land tax attributable to the parcel of land leased to the Tenant.
(the “Relief”)

If a Landlord has not completed payment of its land tax for 2020, the Relief will be reduced or offset against the amount outstanding.

If a Landlord has already paid its land tax for 2020, the amount of the “Relief” will be refunded to the Landlord.

It is the Landlord’s responsibility to verify that the Tenant is in financial distress according to the parameters set by the NSW Government (and noted in our previous publication). As a side note, please ensure you obtain your Tenant’s permission to share information with Revenue NSW regarding the Tenant’s financial distress.

The rent reduction must not be required to be paid back at a later date. If a Landlord reduces the rent, but requires that Tenant to repay the reduction amount, then this is considered a deferral of rent and the Landlord will not meet the criteria to qualify for the Relief.

Please do not hesitate to contact Simon Singer or David Penkin should you have any queries regarding your land tax obligations, whether nor not you qualify for the NSW Government’s relief or if there are other options available to you during this time such as applying for a payment plan.