NSW Commercial Rent Protection

Posted on 7 December 2021 | by Allan Hall

NSW extends commercial rent relief for SMEs to help them recover during this holiday season

The NSW Government extended the rent relief provisions for eligible businesses with a turnover of less than $5 million until 13 January 2022, under the Retail and Other Commercial Leases (COVID-19) Regulation 2021.

If your business is unable to meet lease commitments due to the current COVID-19 public health orders, you may be eligible for protection.

Under the Regulation, retail and commercial property owners must renegotiate rent with eligible tenants in good faith having regard to the leasing principles in the Code of Conduct and the economic impact of the COVID-19 pandemic.

Overview of commercial leasing changes

On 14 July 2021, the NSW Government enacted the Retail and Other Commercial Leases (COVID-19) Regulation 2021 (the Regulation). Amendments passed on 13 August 2021 provide even greater protections to impacted tenants by reinstating National Cabinet’s Commercial Leasing Code of Conduct.

Amendments on 1 December 2021 extend rent negotiation rights to impacted tenants with an annual turnover less than $5 million for the period 1 December 2021 – 13 January 2022.

The Regulation ensures that the economic impact of COVID-19 is shared by property owners and tenants. The protections in the Regulation, combined with the land tax concessions and the newly established Commercial Landlord Hardship Fund, will help limit the long-term economic damage of COVID-19 and maximise the number of businesses that can resume normal operation when public health orders are lifted.

What actions has the Government taken on commercial leases?

Under the Regulation, property owners must negotiate rent relief agreements with eligible tenants in financial distress due to the COVID-19 public health orders.

In negotiating these agreements, property owners and tenants must have regard to the leasing principles in the Code of Conduct, and the economic impacts of COVID-19.

Under those principles, property owners are required to offer tenants rent relief proportionate to the tenant’s decline in turnover. Waivers should make up at least 50 per cent of any rent relief provided. Rental deferrals make up the balance.

If parties are unable to come to an agreement, they must first attend mediation to try and resolve a lease dispute before a lessor can take certain actions against the lessee.

For more information, review the Commercial leases and COVID-19 FAQs on the Small Business Commissioner website or call 1300 795 534.

Contact Allan Hall Business Advisors in Brookvale

New support for NSW commercial tenants and landlords

Posted on 19 August 2021 | by Allan Hall

Mandatory Rent Relief for Commercial and Retail Tenants

The State Government will re-introduce the Mandatory Code of Conduct for Commercial Leasing to mandate rent relief for eligible tenants impacted by COVID-19.

The National Cabinet’s Commercial Leasing Code of Conduct was reinstated by the NSW Government on 13 August 2021.

Under the code, eligible landlords are required to offer rent relief in proportion to their tenants’ decline in turnover. At least 50% must be waivered, and the balance deferred.

The Regulation applies to commercial and retail tenants with a turnover of up to $50 million who qualify for the COVID-19 Microbusiness grant, COVID-19 Business Grant or JobSaver Payment. It prohibits any landlord from evicting or locking out a tenant for lease breaches unless they have first renegotiated rent and attempted mediation.

A new $40 million Hardship Fund will also be established to provide a monthly grant of up to $3,000 for small commercial or retail landlords who provide rental waivers of at least the value of the grant and any land tax relief for which they are eligible.

Allan Hall can provide assistance to our clients as we have done with previous NSW grant programs. Call our team in Brookvale on 02 9981 2300.

NSW COVID-19 land tax relief

Posted on 2 August 2021 | by Allan Hall

Apply for COVID-19 land tax relief

If you’re a  commercial or residential  landowner who has reduced  your tenants’ rent due to COVID-19, between 1 July 2021 and 31 December 2021, you may be eligible for the NSW Government’s land tax relief. 

The relief will be a reduction in the 2021 tax payable on the parcel of land where rent relief has been given to the tenant who occupies that land.

» You can apply online at https://mybusiness.service.nsw.gov.au/transactions/land-tax-relief/ready-to-start

(See the recommended 14-step process for How to Apply on the Service NSW website.)

The land tax reduction will be the lesser of:

the amount of rent reduction you provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021, or
100 per cent of the land tax attributable to the parcel of land leased to that tenant.

Land tax relief will:

be paid to you as a refund if you’ve already paid your land tax
be used to offset the balance of the amount of land tax payable if you have not yet completed payment.

Note: A residential tenancy support payment for properties tenanted in NSW is also available. If you’re a residential landlord, you can apply for either the land tax relief or the residential tenancy support payment. You cannot apply for both, so you’ll need to decide which is more appropriate for you, before applying.

Eligibility

To be eligible for relief on your 2021 land tax,  you’ll need to:

be leasing property on your parcel of land to:
- a commercial tenant who has:
  - an annual turnover of up to $50 million, and is eligible for the:
    - Micro-business COVID-19 Support Grant
    - 2021 COVID-19 NSW Business Grant and/or
    - JobSaver scheme, or
- a residential tenant who has lost 25% or more of household income due to COVID-19.
have reduced the rent of the affected tenant for any period between 1 July 2021 and 31 December 2021
have provided the rent reduction without any requirement for it to be paid back at a later date
have a 2021 land tax liability attributable to the parcel of land where the rent reduction has been given.

If you’re not eligible for land tax relief you can request an extended payment arrangement for your land tax if necessary.

Note: You can still apply for this period of land tax relief, even if you applied for any of the previous relief periods, provided you meet all the eligibility requirements.

For an itemised list of information and proof of identity documents to make an application, please visit the Service NSW website. If you’re eligible, this relief can reduce your land tax liability for 2021 by up to 100%. You can apply for multiple properties in a single application. However, you can only select one bank account per person.

Once you’ve submitted your application you’ll receive a confirmation email. Revenue NSW will review your application and advise you of the outcome. If further information is required they will contact you.

More information

You’re able to apply for multiple properties at the same time.
Only select one bank account per person.
If there’s been a change of circumstances or eligibility since your initial application, you can resubmit your application.
If you’re submitting this application on behalf of a landlord, you’ll need to have the authority to do so.
There is no requirement for rent reduction negotiations to have been concluded when you apply for land tax relief.
Providing false or misleading information will incur penalties.