ANNOUNCED MONDAY 13 APRIL 2020
NSW commercial tenants significantly impacted by COVID-19 will have greater protection from evictions with the State Government set to enact the National Cabinet Code of Conduct as part of a $440 million land tax relief package.
The measures will apply to commercial leases where the tenant is in financial distress due to COVID-19, including but not limited to shops, cafes, gyms, hairdressers, restaurants, offices, warehouses and industrial sites.
Land tax relief is expected to be divided approximately 50-50 with around $220 million going to the commercial sector and a further $220 million expected to benefit the residential sector.
Commercial landlords will be offered a land tax concession if they pass the savings on to tenants through a rent reduction. Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 (calendar year) land tax liability on relevant properties.
The Key measures in the code of conduct are:
Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code.
A ban on the termination of a lease for non-payment of rent.
A freeze in rent increases.
This policy will apply to business tenants with a turnover of less than $50 million that experience a 30 per cent (or more) reduction in revenue as a result of the COVID-19 pandemic, in line with the Prime Minister’s announcement on 7 April.
The Government has ordered a six-month moratorium on new forced evictions if the tenant is in rental arrears because they are suffering financial hardship due to COVID-19.
It applies to tenants who have lost 25 per cent or more of their income.
Eligible tenants will be protected from eviction until the National Civil and Administrative Tribunal is satisfied negotiations have concluded, with any unpaid rent to accrue as arrears in that time.
For more information please see the following NSW Government page here
More information on NSW State Government Financial Assistance measures generally for COVID-19 are also available via this link here
For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au