The NSW Government has introduced measures to provide relief to commercial and residential landowners, who provide a reduction in rent to a tenant who is experiencing financial distress as a result of COVID-19.
The 2021 land tax COVID-19 (1 July 2021 to 31 December 2021) relief announced on 14 July 2021, is intended to reduce a landowner’s land tax payable for 2021, by up to 100 per cent, for a taxable parcel of land where rent relief has been given to the tenant who occupies that land.
The NSW Government has also introduced a range of support payments for properties tenanted in NSW. A property is only able to receive either the 2021 land tax COVID-19 relief, the Residential Tenancy Support Payment or the Commercial Landlord Hardship Fund. Landowners should consider which relief option is most appropriate for them before applying. More information about these support payments is available via Service NSW.
The previous 2021 (1 January 2021 to 28 March 2021) land tax COVID-19 relief period, only applied to commercial leases and impacted lessees as defined by the Retail and Other Commercial Leases (COVID-19) Regulation (No 3) 2020.
Landowners who have already applied for any of the previous relief periods, can also apply for the 2021 land tax COVID-19 (1 July 2021 – 31 December 2021) period provided all eligibility requirements are met.
A landowner can receive a reduction of up to 100 per cent of land tax payable for the 2021 land tax year, subject to the terms of these guidelines.
A landowner providing a reduction in rent to a tenant between 1 July 2021 and 31 December 2021 can receive a reduction in land tax payable for the relevant parcel of land. The land tax reduction will be the lesser of:
Landowners can be eligible for land tax relief provided all eligibility requirements are met.
Landowners can also be eligible for land tax relief for either, or both 2020 land tax COVID-19 relief and 2021 land tax COVID-19 relief, provided all eligibility requirements are met.
Land tax attributable to a parcel of land is calculated as follows:
Taxable value of the parcel of land divided by aggregate taxable value of all parcels of land, multiplied by landowner’s 2021 land tax liability.
If you haven’t completed payment of your land tax for 2021, the relief granted will be used to offset the balance of land tax you have left payable. If your land tax for 2021 has been paid in full, the reduction can be refunded to you.
You’ll be eligible if:
Before applying, you’re responsible for verifying that your;
To be eligible, the rent reduction must not be required to be paid back at a later date. If a reduction in rent is provided but is required to be paid back at a later date, this is considered to be a deferral of rent and won’t be considered as a reduction of rent under this program.
If you’re not eligible for relief under this program but you’re having difficulty paying, you can still apply for a payment plan to extend your payment dates.
Applications for land tax relief are available now via Service NSW and will be open until 31 January 2022.
Relief under this program is being provided under section 5.7 of the Government Sector Finance Act 2018 (the GSF Act) and is subject to the terms and conditions as set out in these guidelines (section 5.7(2) of the GSF Act).
You acknowledge that the following terms and conditions are essential and, if any are contravened, you may be required to repay the relief (section 5.7(3) of the GSF Act):
You also acknowledge that:
Used for business
Has the same meaning as ‘owner’, as defined in the Land Tax Management Act 1956
Has the same meaning as defined in the Land Tax Management Act 1956
Used for a private place of residence
Has the same meaning as prescribed in section 9 of the Land Tax Management Act 1956
If you're a landowner and you don’t have a 2021 land tax liability, refer to the Service NSW website, which provides other NSW Government support options you may be eligible for.
No. The maximum amount of relief that can be given for both 2021 relief periods is a total of 100 per cent of land tax payable for the 2021 land tax year.
Applications for the previous 2021 land tax COVID-19 (1 January to 28 March 2021) relief period closed on 31 May 2021.
No. There is no need to wait for your 2021 land tax COVID-19 (1 January 2021 – 28 March 2021) outcome.
No. This relief period is only for rent reduction provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021.
Outgoings, such as utilities, rates, taxes or body corporate fees are not considered rent for the purposes of this program. As such, if a landowner provides a reduction or waiver of outgoings payable by a tenant, it won't be considered a rent reduction for the calculation of relief under this program.
There is no requirement for rent reduction negotiations to have been concluded or for all rent reductions to have been waived when landowners (or their representatives) apply for land tax relief.
However, if circumstances change after you have submitted your application, for example, the amount of rent reduction differs from the amount in your original application, you will need to notify us of the change in circumstances by uploading your documentation or correspondence on land tax online. You will need your Client ID and Correspondence ID which can be found on your most recent piece of correspondence or assessment notice.
We require the following information for each property to progress your application; a document which details all eligible tenants, including ABN/ACN for commercial tenants and confirmation of the total rent reduced or waived for the 1 July 2021 to 31 December 2021 period.
Other information that is useful in reviewing your eligibility includes; tenancy agreements, rental ledgers, or a letter from an accountant or property manager, your tenant’s financial statements.
If further evidence is required, Revenue NSW will contact you.
If your application for relief is approved, your land tax will not be reassessed for 2021. Your land tax account will instead, be credited with the amount of relief granted. If this results in your account having an overall credit balance, you will receive a refund. If not, the credit will reduce your balance payable. You will receive written advice confirming the outcome of your application.
Yes. Landowners that are trusts can apply for relief under this program.
No. The relief only applies where the reduction of rent has been given to an eligible tenant.
Yes, provided that the new tenant meets the eligibility requirement for this program and a rent reduction is being given to the new tenant.
Please note, reducing the rent you were receiving from the previous tenant to secure a new tenant, is not considered a rent reduction for the purposes of this relief.
Yes. Providing a reduction in rent payable by an eligible tenant via rental credits is considered the same as a rent reduction for the purposes of this program; on the condition that the rental credits are not required to be paid back by the tenant at a later date.
Yes. When completing your application, simply add up the total rent amounts and rent reductions relating to only the eligible tenants on that parcel of land. You will need to provide details of all eligible tenants, including ABN/ACN for commercial tenants and supporting documents for each of these tenancies.
Evidence to support this can be demonstrated with documentation such as a statement from your tenants explaining how they have been impacted by COVID-19, a letter from an employer or accountant, bank statements, payslips or other financial statements.
Any other documentation that helps demonstrate eligibility will be considered.
Where the commercial tenant who is being given a rent reduction is part of a group of companies (i.e. there is one or more companies that are related to the commercial tenant) the annual turnover of the group of companies must be less than $50 million to be eligible for relief under this program.
To be eligible, a commercial tenant must have had, or is part of a group which had, an annual turnover of less than $50 million in the 2019/2020 financial year. This can be demonstrated with documentation such as a letter from an accountant, a tax return, BAS or other financial statements. Any other documentation that helps demonstrate eligibility will be given consideration.
To be eligible, a commercial tenant must have had, or is part of a group which had, an annual turnover of less than $50 million. This refers to the tenant’s annual turnover considering their total commercial activities, not just the commercial activities being conducted at the property where the rent reduction is being given. This includes internet sales.
The lessee of Crown or Local Government land is deemed to be the owner for land tax purposes. Therefore, a lessee under these arrangements can only apply for relief if they are subleasing the land to an eligible tenant under this program.
Where a commercial tenant is a franchisee, the franchisee must meet the requirement to have less than $50 million in annual turnover to be eligible for relief under this program, however some franchise agreements and structures can result in the franchisee and franchisor being considered related companies which can impact eligibility.
Hotel Management Agreements are not considered an eligible ‘lease’ under this program.
Hire agreements, licensing agreements or similar contracts that require payment of a fee or charge for use of a space are not considered an eligible ‘lease’ under this program.
In addition to these measures, there are several options available, such as extending deadlines for payments and getting leniency for late payment.
If the instalment plan can’t be approved online, we’ll contact you.
Where a variable rent agreement is in place, a reduction in rent will only be considered under this program where it can be shown that the variable amount of rent normally due and payable under the terms of the lease is actually waived or reduced by the landlord (i.e. a reduced amount of rent being paid by the tenant in line with the standard terms of the variable lease agreement is not considered a rent reduction).
Only rent reductions provided by the landowner to a tenant are considered for relief under this program. Reduction in rent given to subtenants or sublessees are not considered, except for in some crown lease situations.
Yes. Landowners that are trusts can apply for relief under this program.
No. There is no relief being applied to Surcharge Land Tax under this program.
If you would like to provide additional supporting documents or advise us of a change to an existing application, you can upload your documentation or correspondence on land tax online. You will need your Client ID and Correspondence ID which can be found on your most recent piece of correspondence or assessment notice.
Revenue NSW will review your application and advise you of the outcome.
Yes. Once your application has been processed, you will receive notification of the updated balance you have left payable. If you require a revised instalment plan for the updated balance, you will need to contact 1300 368 710 to arrange this.
If your account is in credit once the relief has been applied, the credit balance will be refunded.