Publications - COVID-19
Residential Tenancies - NSW Government Announcements
Land Tax Relief and NSW Measures
16 April 2020
In our last update, we discussed the implementation of the Mandatory Code of Conduct for commercial tenancies. This update outlines some of the further announcements by the NSW Government in relation to this, as well as a newly announced Land Tax Relief package for landlords and some new information on relief for Residential Tenants.
Land Tax Relief
NSW Parliament is set to approve a $440 million land tax relief package. NSW Treasurer, Dominic Perrottet has announced these following details.
Residential Leases
Minister for Better Regulation and Innovation, Kevin Anderson, and NSW Fair Trading have provided some further information in relation to residential tenancies.
Commercial Leases and the Mandatory Code of Conduct
In our previous update, we discussed the Code of Commercial Tenancies which has been announced by the Federal Government. NSW Treasurer, Dominic Perrottet, has now provided some additional information.
The Federal and NSW Governments have represented these measures will apply over a six month period, with payment plans for arrears for commercial leases extending either for a minimum of a 12 or a 24 month period afterwards (Government statements on this have been inconsistent), or for the remaining term of the lease if more than that period.
NSW Parliament is expected to reconvene shortly to give legal effect to these new measures. We will provide further updates as developments occur.
If you would like advice in relation to your own personal circumstances, please contact us. We will endeavour to respond to any queries that come through on our website as quickly as possible. Click here, or call one of our lawyers.
Land Tax Relief
NSW Parliament is set to approve a $440 million land tax relief package. NSW Treasurer, Dominic Perrottet has announced these following details.
- The relief package will be divided approximately 50/50 with $220 million in relief going to the commercial sector and a further $220 million to benefit the residential sector.
- The measures will apply to commercial leases where the tenant is in financial stress and will include shops, cafes, gyms, hairdressers, restaurants, offices, warehouses and industrial sites.
- Commercial landlords will be offered the land tax concession in the form of rebates provided the saving is passed on to the tenants through a reduction in rent. Waivers have also been raised as a potential option for relief. It is not yet clear how the concession will be implemented specifically.
- Landlords who are eligible (both Commercial and Residential) can apply for a land tax concession of up to 25% of their 2020 land tax liability on their relevant properties. There will be a further land tax deferral for any outstanding amounts for a three-month period who claim the concession.
Residential Leases
Minister for Better Regulation and Innovation, Kevin Anderson, and NSW Fair Trading have provided some further information in relation to residential tenancies.
- There will be an interim 60-day moratorium on making new applications and finalising existing matters with the NSW Civil and Administrative Tribunal (NCAT) for forced evictions over rent arrears related to COVID-19.
- When one or more rent-paying members of a household have lost employment, income, or reduced work hours due to COVID-19 related factors, and have suffered a loss of income equal or greater than 25%, then there will be new obligations on landlords and tenants to enter into negotiations prior to seeking any forced end to the tenancy.
- Tenant advocacy services will receive a $2.5 million funding boost and NSW Fair Trading and NCAT will actively resolve matters after the end of the interim 60 day moratorium. NSW Fair Trading dispute resolution will be made available if parties fail to agree on new rental arrangements and NCAT will be available to make orders when parties are unwilling or unable tor each agreement and action is taken to evict a Tenant.
- Evictions for reasons not related to rent arrears may also be stayed to minimise housing disruption and movement. It is not clear if this will be implemented by policy to NCAT or through legislation.
- Periods of notice under the Residential Tenancies Act for terminations due to fixed or periodic leases ending, or other agreement breaches, will be increased from a 30 day minimum to a 90 day minimum. Tenants will still be able to terminate a fixed-term residency on the basis of financial hardship and Landlords will still be able to seek to recover premises due to their own genuine hardship.
- Tenants will be protected from being blacklisted on tenancy databases for agreement breaches resulting from COVID-19 impacts.
Commercial Leases and the Mandatory Code of Conduct
In our previous update, we discussed the Code of Commercial Tenancies which has been announced by the Federal Government. NSW Treasurer, Dominic Perrottet, has now provided some additional information.
- The previously announced Code will be mediated by the NSW Small Business Commission who will also provide advisory services to commercial parties. The NSW Small Business Commission will receive an injection of $10 million from the existing $1 billion Working for NSW Fund.
- The Code will be incorporated into Regulations in line with what was announced by the National Cabinet. The specifics of the code are discussed in more detail in our prior update. In summary it will provide the following key measures to Tenants and Landlords:
- Landlords must negotiate rent relief agreements with tenants in financial distress;
- termination of a lease for non-payment of rent is prohibited during the pandemic; and
- rent increases are prohibited during the pandemic.
- Landlords must negotiate rent relief agreements with tenants in financial distress;
- The Code will apply to eligible parties who can demonstrate they have experienced a 30% or more reduction in revenue as a result of the pandemic and have an annual turnover of less than $50 million.
The Federal and NSW Governments have represented these measures will apply over a six month period, with payment plans for arrears for commercial leases extending either for a minimum of a 12 or a 24 month period afterwards (Government statements on this have been inconsistent), or for the remaining term of the lease if more than that period.
NSW Parliament is expected to reconvene shortly to give legal effect to these new measures. We will provide further updates as developments occur.
If you would like advice in relation to your own personal circumstances, please contact us. We will endeavour to respond to any queries that come through on our website as quickly as possible. Click here, or call one of our lawyers.
