Tax Relief

Covid-19 | Property tax relief for landlords in NSW

The government of NSW has introduced further property tax breaks for landlords for the land tax year 2021, which give tenants who are in financial distress due to the COVID-19 pandemic rent breaks.

authorization

In order for a landlord to be entitled to tax relief for the property tax year 2021, the following criteria must be met by a landlord:

  • lease a property on a plot of land to:
    • a commercial tenant with:
      • annual sales of up to $ 50 million and is entitled to:
        • COVID-19 Micro Business Support Grant;
        • COVID-19 NSW Corporate Grant 2021; and or
        • JobSaver scheme; or
    • a tenant who has lost 25% or more of their household income due to COVID-19;
  • reduced the rent of the affected tenant for any period between July 1, 2021 and December 31, 2021;
  • have made the rent reduction without being entitled to later repayment, for example by renouncing the rent and not by deferring the rent; and
  • have a real estate tax liability in 2021 that is attributable to the property on which the rent reduction was granted.

A crown land or local government land tenant who is owned for property tax purposes under the Land Tax Management Act 1956 (NSW) may also seek relief if they sublet the land to an eligible tenant as described above.

Reduction of the property tax to be paid

The real estate tax reduction is a reduction in the 2021 real estate tax payable on the property that was granted a rental reduction to the tenant using this property and is the lower of:

  • the amount of rent reduction that a landlord grants an eligible tenant for a period between July 1, 2021 and December 31, 2021; or
  • 100 percent of the property tax is due on the property leased to this tenant.

Any property tax relief granted to a landlord by Revenue NSW for the relief period January 1, 2021 to March 28, 2021, whose applications were completed on May 31, 2021, will be taken into account when applying for relief under these updated measures. Therefore, the maximum real estate tax relief that a landlord can claim for the real estate tax year 2021 is 100 percent of the real estate tax that is payable for the real estate tax year 2021.

Payment of property tax relief

The property tax relief will:

  • to be paid as a refund if the property tax has already been paid by a landlord; or
  • can be used to offset the balance of the property tax to be paid if the payment for the property tax year 2021 has not been completed.

It is not necessary that rent reduction negotiations have been concluded or all rent reductions have been waived when applying for property tax relief. However, should circumstances change after an application has been submitted, updated information must be made available to Revenue NSW immediately.

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