In addition to the Federal Government’s recently announced COVID-19 tax relief measures, the State and Territory governments have also pitched in, announcing various land tax relief measures for eligible land owners. However, not all relief measures are equal and some governments have released more details than others.
We have dealt with the Queensland land tax relief measures in another E Alert that can be accessed here.
To encourage landlords to help their tenants during this crisis, the Victorian Government is offering land tax relief for those landlords who provide rent relief to tenants impacted by COVID-19. The relief will be offered by way of a 25% reduction on the property’s 2020 land tax and will also be available to land owners who are unable to secure tenants due to COVID-19. In order to obtain the rent relief, you need to pass on the equivalent amount in rent relief to the tenant.
In addition to the 25% discount, landlords (both commercial and residential) will also be able to defer the remainder of their 2020 land tax payment obligations to 31 March 2021.
For commercial landlords to be eligible for the above relief (both the 25% discount and the 25% deferral), the property must be rented to a tenant with an annual turnover of up to $50 million and the tenant must eligible for the Commonwealth Government’s JobKeeper Payment. For residential landlords to be eligible, they must be land owners with at least one residential property and have total taxable landholdings below $1 million.
If there are multiple tenancies in a building, you will qualify for the whole discount (even if some of the tenants are not affected) provided that you pass on the rent relief to the affected tenants.
In New South Wales, up to a 25% land tax concession is being offered for commercial and residential landlords who pass on the rent relief to their tenants. If the total relief passed on by landlords is greater than 25% of their annual land tax bill then a further land tax deferral for any outstanding amounts will also be granted for a three month period.
For commercial landlords to be eligible, their tenants must have a turnover of less than $50 million and have experienced a 30% or greater loss of revenue as a result of COVID-19. For residential landlords to be eligible, their tenants must have suffered a loss of income equal to or greater than 25% due to the pandemic.
From July, the South Australian Government will allow businesses and individuals to defer payment of their remaining 2019-20 land tax payments for up to six months. The deferral does not relate to previous outstanding arrears.
The government is also increasing the existing land tax transition fund relief. It was previously announced that transitional relief equivalent to 50% of the increase in a 2020-21 land tax assessment would be available to eligible taxpayers whose land tax bill had increased as a result of the changes in aggregation of land commencing from 1 July 2020. The relief will now be increased to 100% of the increase in an eligible taxpayer’s 2020-21 land tax assessment, subject to the existing criteria.
In Western Australia, taxpayers can apply to have penalty tax remitted by completing a web inquiry form for land tax. Usually penalty tax is only remitted by the Commissioner in exceptional circumstances. However, from 23 March 2020, the Commissioner will remit late payment penalty tax in full for taxpayers who demonstrate that they’ve been directly or indirectly affected by COVID-19.
The Tasmanian Government is waiving land tax for commercial property for the 2020-21 financial year where a business can demonstrate that they’ve been affected by COVID-19. The State Revenue Office of Tasmania is due to provide further details on the relief in the near future.
In the ACT, residential landlords who reduce rent by at least 25% due to COVID-19 may be eligible for a land tax credit to cover 50% of the rental reduction (up to a limit of $1,300 per quarter). Relief for commercial landlords is yet to be announced.
There is no land tax charged in the Northern Territory.
Please contact a member of our taxation or property teams if you would like further information or guidance around your eligibility for the relief.
This article was written by John Caravousanos, Partner and Amy Dewar, Law Graduate.