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2021 land tax COVID-19 relief - Guidelines (1 July 2021 – 31 December 2021)

30 August 2021

Below is a list of guidelines for 1 July 2021 - 31 December 2021 land tax COVID-19 relief. Guidelines for 2020 and
1 January 2021 – 28 March 2021 are also available.

About the program

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.

Relief available

Reduction in land tax payable

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:

  • the amount of rent reduction provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021, or
  • 100 per cent of the 2021 land tax attributable to the parcel of land leased to that tenant.

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.

Eligibility criteria

You’ll be eligible if:

  • you’re leasing a parcel of land to:
    • a commercial tenant, who has an annual turnover of up to $50 million and is eligible for the Micro-business COVID-19 Support Grant, the 2021 COVID-19 NSW Business Grant and/or the JobSaver scheme, or
    • a residential tenant who has had a reduction in household income of 25 per cent (or more) as a result of COVID-19,
  • you reduce the rent of the affected tenant for any period between 1 July 2021 and 31 December 2021, and
  • for 2021, you have land tax attributable to the parcel of land leased to that tenant.
  • You are not claiming either:

Before applying, you’re responsible for verifying that your;

  • residential tenant is in financial distress, and/or
  • commercial tenant is eligible for the Micro-business COVID-19 Support Grant, the 2021 COVID-19 NSW Business Grant and/or the JobSaver scheme.

Rent reduction

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.

How to apply

Applications for land tax relief are available now via Service NSW and will be open until 31 January 2022.

Other conditions

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):

  1. You are being provided relief on the basis that your application, including any statements, information or documentation provided to demonstrate that you satisfy the eligibility criteria, is true and accurate.
  2. If there is a change in your circumstances affecting your eligibility after an application is submitted, you must notify us by submitting an amended application as soon as practicable. This includes a change in tenant or a change in rent during the period for which an application has been submitted. An amended application may result in a change to the amount of relief previously provided to you and you may be required to repay all or part of the relief.
  3. Your relief is calculated as at your 2021 land tax liability at the time your application is determined. If there is any reassessment of your 2021 land tax liability after relief is provided under this program, your relief may be recalculated and you may be required to repay all or part of the relief.
  4. You consent to Revenue NSW disclosing information about your 2021 COVID-19 land tax relief application to NSW Fair Trading in the Department of Customer Service to assist NSW Fair Trading to administer the Residential Tenancy Support Payment.
  5. You consent to Revenue NSW disclosing information about your 2021 COVID-19 land tax relief application to Service NSW in the Department of Customer Service to assist Service NSW to administer the Commercial Landlord Hardship Fund.

You also acknowledge that:

  • Applications submitted for this program will be subject to potential compliance review for legitimacy.
  • Eligibility of both landowners and tenants can be reviewed to confirm that relief under this program has been correctly requested and applied for.
  • Providing false or misleading information in an application for 2021 land tax COVID-19 relief, or not notifying us of a change in your circumstances, may result in a land tax reduction under this program being revoked. If you are required to repay the relief and do not do so, the relief may be recovered from you as a debt. It’s also an offence to provide false or misleading information and penalties may apply.

Definitions

Commercial

Used for business

Landowner

Has the same meaning as ‘owner’, as defined in the Land Tax Management Act 1956

Land tax year

Has the same meaning as defined in the Land Tax Management Act 1956

Residential

Used for a private place of residence

Taxable value

Has the same meaning as prescribed in section 9 of the Land Tax Management Act 1956

Frequently asked questions

I do not pay land tax. Am I eligible for the relief?

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.

I am eligible for both 2021 land tax COVID-19 relief periods (1 January 2021 – 28 March 2021 and 1 July – 31 December 2021). Will I receive a reduction of 125 per cent of my land tax payable for the 2021 land tax year?

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.

Can I apply for land tax relief for the rent reduction I provided to my tenant during April, May and June 2021?

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.

My tenant pays outgoings, such as utilities, rates or other fees and charges in addition to rent, as part of their lease agreement. Are these costs considered a rent reduction if they are waived or reduced?

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.

Can I apply while I’m still negotiating with my tenant?

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.

What information do I need to include in my application?

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 my application for relief is approved, will I be reassessed for land tax?

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.

I own land in a trust. Can I still apply for the land tax relief?

Yes. Landowners that are trusts can apply for relief under this program.

If I have lost income due to my property being vacant or my tenant moving out, am I still eligible for land tax relief?

No. The relief only applies where the reduction of rent has been given to an eligible tenant.

If I get a new tenant, am I still eligible for land tax relief?

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.

I am providing rental credits rather than a reduction of rent. Am I still eligible for land tax 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.

If I have multiple tenants on a parcel of land, am I still eligible for land tax relief? What if not all of these tenants are eligible?

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.

How can a residential tenant demonstrate that they meet the requirements to have had a 25 per cent reduction in household income?

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.

How does the requirement for commercial tenants to have less than $50 million in annual turnover apply if they are part of a group of companies?

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.

How can a commercial tenant demonstrate that they meet the requirement to have less than $50 million in annual turnover?

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.

How does the requirement for commercial tenants to have less than $50 million in annual turnover apply if their commercial activities extend beyond the property where the rent relief is being given?

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.

I am a lessee of land owned by Crown or Local Government. Am I eligible for land tax relief?

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.

If my commercial tenant is a franchisee, am I eligible for land tax relief?

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.

Do Hotel Management Agreements meet the eligibility requirements for land tax relief?

Hotel Management Agreements are not considered an eligible ‘lease’ under this program.

Do hire agreements, licensing agreements or other similar contracts meet the eligibility requirements for land tax relief?

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.

Can I pay by instalments?

In addition to these measures, there are several options available, such as extending deadlines for payments and getting leniency for late payment.

Apply for an instalment plan

If the instalment plan can’t be approved online, we’ll contact you.

If I have a variable rent agreement, am I eligible for land tax relief?

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).

Are rent reductions to sublessees considered for land tax relief?

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.

I own land in a trust. Can I still apply for the land tax relief?

Yes. Landowners that are trusts can apply for relief under this program.

Does the land tax relief apply to Surcharge Land Tax?

No. There is no relief being applied to Surcharge Land Tax under this program.

I lodged an application, but I now have additional information/documents that I want to provide. What should I do?

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.

Who will let me know the outcome of my application?

Revenue NSW will review your application and advise you of the outcome.

Can I still apply for the land tax relief if I have already paid or set up an instalment plan?

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.