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 50 per cent, for a taxable parcel of land where rent relief has been given to the tenant who occupies that land.
A landowner can receive a reduction of up to 50 per cent of land tax payable for the 2020 land tax year, subject to the terms of these guidelines. There are two relief periods for which a landowner can apply for relief.
A landowner providing a reduction in rent to a tenant between 1 April 2020 and 30 September 2020 can receive a reduction in land tax payable for the relevant parcel of land. The land tax reduction will be the lesser of:
A landowner providing a reduction in rent to a tenant between 1 October 2020 and 31 December 2020 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 for either, or both of these relief periods, 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 2020 land tax liability.
If you haven’t completed payment of your land tax for 2020, the relief granted will be used to offset the balance of land tax you have left payable. If your land tax for 2020 has been paid in full, the reduction can be refunded to you.
A deferral of up to 3 months on land tax payments may also be granted to eligible landowners who applied for relief on or before 30 September 2020.
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 for the period 1 April 2020 – 30 September 2020 and 1 October 2020 – 31 December 2020 is currently available via Service NSW.
Applications close on 31 March 2021.
You will need the following to complete an application:
Examples of supporting documents include, but are not limited to:
You must obtain your tenant’s permission to share their information with us.
Should further evidence be required to determine the eligibility or validity of an application, we’ll contact you.
We’ll try to process your application within 30 days.
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
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.
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
No rent reductions were given in period 2 so no relief is available to the landowner for this period.
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.
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.
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
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
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).
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.
There is no requirement for rent reduction negotiations to have been concluded or for all rent reductions to have been waived (or paid) 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 submitting a new application.
Submit a new application with the additional information/documentation.
Yes, you can apply for multiple properties at the same time in the one application.
If your application for relief is approved, your land tax will not be reassessed for 2020. 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 a confirmation letter for the outcome of your application rather than an assessment notice.
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 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.
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 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.
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 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 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, 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.
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).
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.
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.