Example 1
Scenario
A landowner owns one property valued at $10,000,000, with a 2020 land tax liability of $170,404. The property is rented to a total of five commercial tenants, three of whom are impacted by COVID-19 and are eligible under these guidelines.
Each of the three eligible tenants’ leases require them to pay $10,000 per month.
As a result of the COVID-19 impacts, the landlord waives two months’ rent for each eligible tenant between 1 April and 31 May 2020.
Calculation for period 1
Rent reduction total = 3 (eligible tenants) x $10,000 (monthly rent) x 2 (number of months' waived) = $60,000
Land Tax attributable to the parcel of land = $10,000,000 (taxable property value) / $10,000,000 (total value of all taxable properties) x $170,404 (2020 land tax liability) x 25% = $42,601
Calculation for period 2
No rent reductions were given in period 2 so no relief is available to the landowner for this period.
Outcome:
The land tax relief granted to the landowner is equal to the lesser of the rent reduction ($60,000), or 25% of land tax attributable to the parcel of land ($42,601).
For this example, the total relief available is $42,601.
Example 2
Scenario
A landowner owns two properties: one valued at $10,000,000 (property 1), the other $5,000,000 (property 2), with a 2020 land tax liability of $270,404.
Property 1 is rented to a tenant who is impacted by COVID-19 and is eligible under the guidelines. The eligible tenant's lease requires them to pay $10,000 per month.
As a result of the COVID-19 impacts, the landlord waives six months’ rent for this tenant between 1 July 2020 and 31 December 2020.
Calculation for period 1
Rent reduction total = 1 (eligible tenant) x $10,000 (monthly rent) x 3 (number months' waived) = $30,000
Land Tax attributable to the parcel of land = $10,000,000 (taxable property value) / $15,000,000 (total value of all taxable properties) x $270,404 (2020 land tax liability) x 25% = $45,067.33
Calculation for period 2
Rent reduction total = 1 (eligible tenant) x $10,000 (monthly rent) x 3 (number months' waived) = $30,000
Land Tax attributable to the parcel of land = $10,000,000 (taxable property value) / $15,000,000 (total value of all taxable properties) x $270,404 (2020 land tax liability) x 25% = $45,067.33
Outcome
The land tax relief granted to the landowner is equal to the lesser of the rent reduction ($30,000), or 25% of land tax attributable to the parcel of land ($45,067.33) for each period.
For this example, the total relief available is $60,000 (i.e. $30,000 for each relief period).