The package, which follows the mandatory code of conduct announced by the Prime Minister last week, will offer rent relief in the form of land tax waivers or rebates and a stay on evictions due to rental arrears for those financially disadvantaged by COVID-19. It will also require landlords and tenants to enter into negotiations over rental payments in good faith.
Treasurer Dominic Perrottet explained that the land tax relief is expected to be divided approximately 50-50, with around $220 million going to the commercial sector and a further $220 million expected to benefit the residential sector.
Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 (calendar year) land tax liability on relevant properties if they pass the saving on to tenants in financial distress through a rent reduction.
“This provides a way forward for tenants and landlords so they can reach an agreement during this difficult period and includes an incentive in the form of a land tax reduction,” Mr Perrottet said.
“It’s also important that tenants suffering financial distress as a result of COVID-19 will not be blacklisted for the accrual of rental arrears during this time.”
For commercial tenancies, the policy will apply to business tenants with a turnover of less than $50 million that experience at least a 30 per cent reduction in revenue as a result of the COVID-19 pandemic.
This will include any business with annual turnover of less than $50 million that is eligible for the Commonwealth’s JobKeeper program.
Mr Perrottet said the aim is to help businesses stay afloat and provide greater surety for tenants and landlords.
“I thank the many landlords who are already supporting their tenants through this period and the banks for showing flexibility with deferring loan repayments — we are all in this together and need to work together,” Mr Perrottet said.
Eligible residential tenants are described as households struggling to make rental payments that have suffered a loss of income equal to or greater than 25 per cent due to COVID-19.
Residential landlords will be eligible for a land tax waiver or rebate of up to 25 per cent if they pass the savings on to tenants in financial distress.
Also part of the package is a stay on evictions on both residential and commercial leases.
Minister for Better Regulation and Innovation Kevin Anderson explained that an interim 60-day moratorium will apply on finalising existing matters, or making new applications to the NSW Civil and Administrative Tribunal (NCAT) for forced evictions over rent arrears related to COVID-19.
Tenants will be protected from eviction until NCAT is satisfied that negotiations have concluded. Any unpaid rent will accrue as arrears during this period.
“We know many people are worried about meeting their financial commitments at the moment. That is why we need more stability for tenants and landlords while the new Commonwealth income support payments are rolled out, and landlords talk to their bank about mortgage relief,” Mr Anderson said.
To facilitate these changes, and deliver increased mediation and advisory services to commercial parties, the NSW Small Business Commission will be bolstered with extra staff and an injection of $10 million from the $1 billion Working for NSW Fund.
Applauding the package, Finance and Small Business Minister Damien Tudehope said it demonstrated the need for a united effort to endure the COVID-19 pandemic.
“Breathing room on rent is one of the most frequently raised issues by businesses, and we want to ensure we protect retailers and offer landlords an incentive to do so. We also want to ensure retail tenants have more time and options,” Mr Tudehope said.
“For any small business, rent is one of the biggest fixed costs; easing this burden will help operators survive and keep people employed.”