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COVID-19 land tax relief in Queensland

Land tax relief measures announced

The Queensland Government has announced land tax relief for eligible landowners affected by the COVID-19 pandemic. If you have land tax liabilities for holdings of residential and/or commercial properties, then you may be able the relief measures.

The following land tax relief measures may be available to you:

  • a rebate for the 2019-20 assessment year reducing liability by 25% for eligible properties;
  • a waiver of the 2% foreign surcharge for the 2019-20 assessment year;
  • a 3-month deferral of land tax liability for 2020-21 assessment year.

You do not need to apply for the waiver of the foreign surcharge or the 3-month deferral.

The Office of State Revenue will reassess land tax to apply the waiver and provide a refund where the assessment amount has already been paid.

However, you will need to apply for the land tax rebate.

How do I apply for the rebate?

First, check that you are eligible to receive the rebate.

To be eligible for the land tax rebate, at least one of the following circumstances must apply to you:

  1. You are a landowner who leases all or part of a property to one or more tenants and all the following apply:
    • One or more tenants is having difficulty paying rent due to the COVID-19 pandemic;
    • You will provide rent relief to affected tenants of an amount at least commensurate with the land tax rebate;
    • You will comply with the Leasing Principles (we talk about these below)
  1. You are a landowner and all the following apply:
    • All or part of your property is available for lease;
    • Your ability to secure tenants has been affected by the COVID-19 pandemic;
    • You require relief to meet your financial obligations; and
    • You will comply with the Leasing Principles

The land tax rebate will only apply to each property that meets the above eligibility requirements and conditions, rather than the rebate applying to entire taxable landholdings.

If you are eligible for the land tax rebate under both the above circumstances, it is expected you will apply the rebate firstly to provide rent relief to your residential or commercial tenants. You can then apply any remaining rebate to your own financial obligations (e.g. in relation to debt and other expenses).

Where there are multiple tenants for a single property, including mixed-use developments, if the eligibility requirements and conditions are met for at least one tenancy, then the whole property is eligible for the land tax rebate.

The land tax rebate does not need to be repaid if the eligibility requirements and conditions are met.

You can apply for the land tax rebate up to 30 June 2020.

To apply for the rebate, log in OSR Online.

What are the Leasing Principles?

The Leasing Principles were introduced by the Australian Government and will be enacted into law in each State and Territory. We set out below a summary of the leasing principles relevant to the eligibility for the land tax relief measures.

A landowner must commit to comply with the following Leasing Principles in order to access land tax relief.

For residential landowners:

  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
  2. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
  3. You will not end a tenancy for any reason other than on an approved ground; this does not include the tenant’s inability to pay rent or the end of a fixed term lease;
  4. You will not charge break lease fees for tenants who need to end a fixed term tenancy early due to the financial, health or personal safety impacts of COVID-19; and
  5. You will allow a tenant to refuse entry for non-essential reasons, including routine repairs and inspections, particularly if a member of the household has a higher risk profile if exposed to COVID-19.

For commercial landowners:

  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
  2. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
  3. You will not increase rent, except where rent is linked to turnover;
  4. You will not penalise a tenant who stops trading or reduces opening hours;
  5. You will not charge any interest on unpaid or deferred rent; and
  6. You will not make a claim on a bank guarantee or security deposit for non-payment of rent.

Codes of Conduct

In addition to these principles, the Australian Government has also announced a mandatory code of conduct for small and medium enterprise commercial tenancies. Each State and Territory will enact its own Code in this regard. At the time of writing, we await the Queensland Code of Conduct.

However, compliance with this code is not a requirement to receive land tax relief, but landholders with small and medium enterprise commercial tenancies will need to be familiar with the code once it becomes law.

We address the SME commercial tenancies code in another newsletter.

 

 

Please note that this article was prepared by Zoë Brereton of Bell Legal Group for general information only. It is not legal advice and should not be relied upon as such.

For legal advice about your situation call us on +617 5597 3366 or complete the Contact Us form below.