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Covid-19: Land Tax Relief for Landlords

The NSW Government has introduced measures to provide relief to both commercial and residential landlords, who provide a reduction in rent to a tenant who is experiencing financial distress as a result of COVID-19.

The measures provide for a reduction in land tax payable for the 2020 and tax year, with the reduction being the lesser of:-

•    the amount of rent reduction provided to a tenant for any period between 1 April 2020 and 30 September 2020, or
•    25 per cent of the land tax attributable to the parcel of land leased to the tenant.

To be eligible for the relief measures, the landlord must:-

•    be leasing to a commercial tenant with an annual turnover of less than $50m and there has been a reduction in turnover of at least 30% compared to a previous comparable period, or   
•    be leasing to a residential tenant with a reduction in household income of at least 25%.

The rent reduction also 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 the relief ill not apply.

Where land tax for 2020 has already been paid the relief will be refunded otherwise, it will be offset against the amount still to be paid. Where a landlord receives a reduction in land tax, they will also be eligible to have outstanding payments deferred for up to three months.

Liability limited by a scheme approved under Professional Standards Legislation

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