Key Highlights 

•    State and Territory governments are rolling out their responses to the Mandatory Code of Conduct announced by the National Cabinet on 7 April 2020. 
•    Governments are currently working through the detail of the Code, as well as outlining the kind of relief they will provide to commercial property owners in the form of land tax waivers and rebates (that can be passed onto eligible tenants).
•    NSW, Qld, Victoria and Tasmania have announced tax relief packages.
 
NSW: Recently announced a $440M package for commercial and residential landlords and tenants as part of the state’s response to the Mandatory Code of Conduct, which includes land tax waivers or rebates. 

Treasurer Perrottet recently announced the proportionality principle outlined in the Code, where landlords will need to offer tenants rent relief proportionate to the tenant’s decline in turnover, will be implemented for small to medium enterprise tenants. The Mandatory Code specifies that a rent waiver should make up at least 50% of any rent relief.  
Landlords will be eligible for the land tax waiver or rebates if they pass the savings onto tenants in financial distress. Eligible landlords will be able to apply for a land tax concession of up to 25% of their 2020 calendar year land tax liability on relevant properties. 

A further land tax deferral for any outstanding amounts for a three-month period will also be offered to landlords who claim the land tax concession. 

Additional funding is being provided to the Office of the Small Business Commissioner for extra staff to provide a dispute resolution service (mediation).  

Queensland: Their response to the Code includes a $400M land tax relief package.

Treasurer Jackie Trad recently announced the Government will move to legislate to implement protections for retail, commercial and residential tenants. 

Eligible landowners can apply for land tax relief from 14 April 2020 and will be offered a 25% rebate on land tax already paid for 2019/2020. Land tax assessments for 30 June 2020 will be deferred by three months for eligible landowners. 

The foreign land tax surcharge will be abandoned for 2019/2020. 

Victoria: Has announced a $500M package of assistance for rent relief and mediation support for commercial and residential landlords and tenants.  

This includes a ban on evictions for six months for non-payment of rent in commercial tenancies where the business has an annual turnover less than $50M and has experienced a 30% minimum reduction in turnover due to coronavirus.  

Landlords and tenants will be encouraged to agree to rental waivers and deferrals for eligible businesses. $249M in land tax relief will be provided to landlords who are supporting their tenants.  

Commercial tenants and landlords will have access to a biding mediation process through the Victorian Small Business Commission. 

South Australia: Parliament recently passed legislation to give effect to the ‘good faith’ leasing principles set out in the Code, and protects retail and commercial tenants from eviction if they are unable to meet lease requirements due to the impact of the pandemic.  It proscribes certain actions by landlords and includes broad mediation powers to be facilitated through the Small Business Commissioner. 

Western Australia: State Government will shortly introduce legislation to Parliament to implement a range of measures for commercial and residential tenancies.  

The Commercial Tenancies (COVID-19 Response) Bill 2020 will introduce a moratorium on evictions for small commercial tenancies and provide a range of other measures to offer support for tenants in response to COVID-19, including the introduction of the Code for landlords and tenants. 

Other States and Territories: Further announcements are expected shortly from other state and territory governments on their approach to implementing the Code. Tasmania has already announced a land tax relief package, while the ACT and NT governments also have local economic and business stimulus packages.
 
This article has been prepared with the kind assistance of the Property Council of Australia and was arranged by Geoffrey Learmonth, Founder and a Director of LPC.