Land Tax Reduction and Deferrals for Eligible Landlords

With the deferral date for the 2020 Land Tax fast approaching, it’s timely to revisit the reductions and deferrals available to eligible landlords.

2020 LAND TAX REDUCTION FOR ELIGIBLE LANDLORDS

Eligible landlords may be entitled to a 25% reduction of their 2020 Land Tax as below:

Residential landlords

• Landlords who provided tenants impacted by coronavirus with rent relief consistent with the principles of the Support to Landlords and Tenants package between 29 March 2020 and 31 December 2020, or
• Who were are unable to secure a tenant during 2020 because of coronavirus (exclusive of any absentee owner surcharge).

Commercial landlords

For commercial landlords to be eligible, they must provide rent relief consistent with the Commercial Tenancy Relief Scheme. They must also get their tenant to declare to them (tenants can use the State Revenue Office commercial tenant details SmartForm and then email it to their landlord) that they meet the conditions in either of these two categories:

1. For general commercial tenants:
   1. Annual aggregated turnover was no greater than $50 million in either the 2018-19 or 2019-20 financial year, and
   2. They are eligible for, and participating in, the Australian Government’s JobKeeper Payment.
2.  For commercial tenants operating a licensed pub, club or restaurant under a general, full club or on-premises liquor licence:
   1. At the premises level, annual turnover was no greater than $50 million in either the 2018-19 or 2019-20 financial year, and
   2. Turnover at that premises has reduced by at least 30% since March 2020.

Land tax relief will not be provided if the State Revenue Office determine that the rent relief provided to a tenant is:

• Not genuine and is not consistent with the principles of the Support to Landlords and Tenants package or the Commercial Tenancy Relief Scheme, or
• If the amount of rent waived between 29 March 2020 and 31 December 2020 is less than 25% of the proportional land tax for the property.

Landlords of residential and commercial properties who provide a 50% or more outright rent waiver of at least 3 months’ rent to eligible tenants can claim up to a 50% reduction of the property’s 2020 land tax.

Landlords of properties with multiple tenancies can make a single application for a 2020 land tax reduction of 25% for the whole property, rather than just for the part of the property occupied by eligible tenants who have received rent relief. They will also be able to access an additional 2020 land tax reduction of up to 25% (a total reduction of up to 50%) for the whole property provided they have reached agreement on rent relief with the majority of their tenants, and provided sufficient rent relief.

Applications for reduction of 2020 Land Tax close on 31 March 2021.

2021 LAND TAX REDUCTION AND DEFERRAL FOR ELIGIBLE LANDLORDS

A 25% reduction and/or deferral of 2021 Land Tax may be available to eligible participants under the above criteria, with reference to the rent relief period of 1 January 2021 to 28 March 2021. Deferrals of Land Tax can extend to as late as 30 November 2021.

These landlords can defer paying the remainder of their 2021 land tax assessment (and any 2020 land tax previously deferred under the 2020 relief measures) until, or before, 30 November 2021. They can also have any amounts of their 2021 land tax liability that they have already paid returned but must pay their 2021 land tax liability (as reduced by this relief measure) by 30 November 2021.

Applications for reduction and deferral of 2021 Land Tax close on 30 June 2021.

Should you have any questions or need any help changing your eligible employees, please reach out to your accountant and we will do our best to assist.

The Team at Rose Partners