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 2020 land tax COVID-19 relief is intended to reduce a landowner’s land tax payable for 2020, by up to 25 per cent, for a taxable parcel of land where rent relief has been given to the tenant who occupies that land.
Landowners eligible for the reduction may also defer their land tax payments by up to three months.
You’ll receive a reduction in your land tax payable for the 2020 land tax year, subject to the terms of these guidelines.
The reduction will be the lesser of:
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 2020 land tax liability.
If you haven’t completed payment of you land tax for 2020, the relief will reduce or offset the amount you have left payable. If you have already paid your land tax for 2020, the reduction can be refunded to you.
If you receive a reduction under this program, you’ll also be able to have your outstanding land tax payments deferred for up to three months.
You’ll be eligible if:
A tenant is considered to be in financial distress where:
You’re responsible for verifying that your tenant is in financial distress.
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 a reduction in land tax or a deferral in land tax payments under this program but you’re having difficulty paying, you can still apply for a payment plan to extend your payment dates.
2020 land tax COVID-19 relief is available via Service NSW.
You’ll need the following to complete an application:
Examples of supporting documents include, but are not limited to:
Should further evidence be required to determine the eligibility or validity of an application, we’ll contact you.
We’ll endeavour to process your application within 30 days.
Once an application is submitted, you must notify us by submitting an amended application as soon as practicable if there is a change in your circumstances or eligibility for the program. 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 reduction in land tax previously provided to you under this program.
Any reassessment of a 2020 land tax liability that occurs after a reduction has been allowed under this program, may result in a recalculation of the reduction.
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.
Providing false or misleading information in an application for 2020 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. It’s also an offence to provide false or misleading information and penalties may apply.
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
Landowner owns one property valued at $10 million, with a 2020 land tax liability of $400,000. The property is rented to a total of five commercial tenants, three of whom are impacted by Covid-19 and are eligible under the guidelines.
Each of the three eligible tenant's 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.
Rent reduction total = 3 (eligible tenants) x $10,000 (monthly rent) x 2 (number of months' waived) = $60,000
$10,000,000.00 (taxable property value) / $10,000,000.00 (total value of all taxable properties) x $400,000 (2020 land tax liability) x 25% = $100,000
Reduction paid to landowner is equal to the lower of rent reduction or 25% of land tax liability.
For this example, the relief available is $60,000.
Landowner owns two properties, one valued at $10 million (property 1), the other $5 million (property 2), with a 2020 land tax liability of $500,000.
Property 1 is rented to a total of five commercial tenants, one of whom is impacted by Covid-19 and is eligible under the guidelines. The eligible tenant's lease requires them to pay $150,000 per annum.
As a result of the Covid-19 impacts, the landlord waives six months’ rent for this tenant between 1 April 2020 and 30 September 2020.
Rent reduction total = 1 (eligible tenant) x $150,000 (annual rent) x 0.5 (6 of 12 months' waived) = $75,000
$10 million (taxable property 1 value) / $15 million (total value of all taxable properties) x $500,000 (2020 land tax liability) x 25% = $83,333.33
Reduction paid to landowner is equal to the lower of rent reduction or 25% of land tax liability.
For this example, the relief available is $75,000.
Landowner owns two properties, one worth $10 million (property 1), the other worth $5 million (property 2), with a 2020 land tax liability of $500,000.
Property 1 is rented to two commercial tenants, both of whom are impacted by Covid-19 and are eligible under the guidelines.
The tenants' leases require them to pay $30,000 per month each.
As a result of the Covid-19 impacts, the landlord waives three months’ rent for each tenant between 1 April 2020 and 30 September 2020.
Rent reduction total = 2 (eligible tenants) x $30,000 (monthly rent) x 3 (number of months' waived)) = $180,000
$10 million (taxable property 1 value) / $15 million (total value of all taxable properties) x $500,000 (2020 land tax liability) x 25% = $83,333.33
Reduction paid to landowner is equal to the lower of rent reduction or 25% of land tax liability.
For this example, the relief available is $83,333.33.
The amount of reduction will be the lesser of:
If your application is successful, any payments remaining that need to be made will be automatically deferred for 3 months without interest.
No. There is no relief being applied to Surcharge Land Tax under this program.
Yes. In fact, it is a requirement to notify us by submitting a new application if there has been a change in circumstances from when an initial application is submitted.
Submit a new application with the additional information/documentation.
Yes, you can apply for multiple properties at the same time in the one application.
Yes, you can lodge applications for multiple clients. However, you must complete an application before you can commence another one.
The application is currently only available through Service NSW. Contact Service NSW on 13 77 88 if you need assistance setting up an account. Alternately, you can have a representative submit the application on your behalf, such as an accountant, property manager or family member.
If you're a landowner and you don’t have a 2020 land tax liability, refer to the Service NSW website, which provides other NSW Government support options you may be eligible for.
Revenue NSW will review your application and advise you of the decision.
Yes. Once your application has been processed, you will receive notification of the balance you have left payable. If your account is in credit once the relief has been applied, the credit balance will be refunded.
Yes. Landowners that are trusts can apply for relief under this program.
No. The relief only applies where the reduction can be passed on 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.
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 and provide supporting documents for each of these tenancies.
Evidence to support this can be demonstrated with documentation such as a letter from an employer or accountant, bank statements, payslips or other financial statements. Any other documentation that helps demonstrate eligibility will be given consideration.
Evidence to support this can be demonstrated with documentation such as a letter from an accountant, bank statements, BAS or other financial statements for comparative periods (for example, documentation for the current month or quarter compared to the same month or quarter in the previous financial year). Evidence that the business meets requirements for JobKeeper can also be considered as the same eligibility criteria for reduction in turnover applies for both programs. Any other documentation that helps demonstrate eligibility will be given consideration.
To be eligible, a commercial tenant must have had an annual turnover of less than $50 million in the 2018/2019 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.
The requirement for commercial tenants to have less than $50 million in annual turnover to be eligible for relief under this program 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.
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.
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.
Hotel Management Agreements 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 (ie 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).
Outgoings, such as utilities, rates or body corporate fees are not considered rent. As such, if a landowner provides a reduction or waiver of outgoings payable by a tenant, it won't be considered a rent reduction under this program.