State governments have announced a temporary reduction in land tax for commercial properties as they prepare to legislate the federal government’s commercial tenancy code of conduct announced last week.
Queensland and NSW will both provide up to a 25 per cent discount on land tax for the 2020 calendar year on the proviso that savings are passed on to tenants in the form of commensurate rent relief.
In Queensland landlords with a vacant property currently available for lease are also eligible to apply for the discount.
That state has also announced it will defer the introduction of the foreign land tax surcharge – a surcharge for foreign companies that own land.
Both states will also offer a three-month land-tax deferral for the coming tax year.
To be eligible to have the land tax savings passed on by their landlord, NSW businesses will need to have a turnover of $50 million or less and have seen a reduction of at least 30 per cent in revenue as a result of COVID-19. Queensland has not specified the eligibility criteria for commercial tenants.
In addition – a mandatory commercial tenancy code has been established to be regulated by each state.
The code includes a common set of 14 principles. These include that:
landlords must not terminate leases for non-payment of rent during the COVID-19 pandemic (or reasonable recovery period)tenants must stay committed to their lease terms (subject to amendments)landlords must offer reductions in rent (as waivers or deferrals) based on the tenant’s reduction in trade during COVID-19benefits that owners get for their properties (e.g. reduced charges, land tax, deferred loan payments) should be passed on to the tenant (in the appropriate proportion