Covid-19: Update on Land Tax

Covid-19: Update on Land Tax

Having issues paying Land Tax during the Covid-19 Pandemic?

A number of our clients have approached us recently in relation to their land tax obligations and the concessions made by the NSW Government this week.

While Landlords are still bound to pay land tax and other outgoings during the Covid-19 Pandemic, some relief may be accessible for the commercial and residential lease sector by way of:

• a land tax concession of up to 25% of the 2020 land tax liability on relevant properties; and

• a deferral for any outstanding land tax for a 3 month period.

However, it is important to note that both Landlords and Tenants understand that the relief only applies to those significantly impacted by Covid-19. This means that:

• in the case of a business tenant, the tenant’s turnover must be less than $50 million and the business must have experienced a 30% (or more) reduction in revenue as a result of Covid-19;

• in the case of a residential tenant, the tenant’s household income must have been reduced by 25% as a result of Covid-19.

In addition, Landlords should be aware that to qualify for the above land tax concessions, Landlords must reduce the rent of the affected Tenant by at least as much as the tax reduction.

In the event your Tenants do not meet the “significantly impacted” criteria noted above, we have recently been successful with applying to Revenue NSW for payment of land tax by way of instalments on an interest free basis.

Please do not hesitate to contact Simon Singer or David Penkin should you have any queries regarding your land tax obligations, whether or not you qualify for the NSW Government’s relief or if there are other options available to you during this time.