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Support for Commercial Landlords in Queensland

Tuesday, 14 April 2020

On 9 April 2020, the Queensland Government released a $400 million package to support landlords and tenants, including land tax relief for eligible landlords.

Who is eligible for land tax relief?

The land tax relief offered by the Queensland Government will be available to landowners if either of the following circumstances apply:

  1. You are a landlord with existing leases in place and all of the following apply:
    • the ability of one or more tenants to pay their normal rent is affected by the COVID-19 pandemic;
    • you will provide rent relief to the affected tenant(s) of an amount at least commensurate with the land tax relief; and
    • you will comply with the leasing principles set out below.
  2. You are a landowner with all or part of your property available for lease and all of the following apply:
    • your ability to secure a tenant(s) has been affected by the COVID-19 pandemic;
    • you require relief to meet your financial obligations; and
    • you will comply with the leasing principles set out below.

What are the leasing principles that must be complied with?

For commercial landowners to be eligible to receive land tax relief, you must commit to comply with the following principles:

  • You will negotiate in good faith with your tenant(s) to seek a mutually agreeable resolution if their ability to pay normal rent is affected by the COVID-19 pandemic.
  • You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the COVID-19 pandemic.
  • You will not increase rent, except where rent is linked to increased turnover.
  • You will not penalise your tenant(s) who stops trading or reduced trading hours.
  • You will not charge any interest on unpaid or deferred rent.
  • You will not make a claim on any bank guarantee or security deposit for non-payment of rent.

What relief is available?

Landowners may be eligible for one or more of the following land tax relief measures:

  • a land tax rebate to reduce land tax liabilities by 25% for eligible properties for the 2019-20 assessment year;
  • a waiver of the 2% land tax foreign surcharge for foreign entities for the 2019-20 assessment year; and
  • a 3-month deferral of land tax liabilities for the 2020-21 assessment year.

Application for relief

No application is required for the waiver or deferral. The Office of State Revenue will reassess land tax to apply the waiver and provide a refund where the assessment amount has already been paid. However, application will need to be made for the land tax rebate.

If a landowner is eligible for the rebate, it is expected that the rebate will be applied firstly to provide rent relief to your tenant(s). You can then apply any remaining rebate to your own financial obligations.

The land tax rebate will only apply to each property that meets the above eligibility requirements and conditions, rather than the rebate applying to entire taxable landholdings.

Where there are multiple tenants for a single property, including mixed-use developments, if the eligibility requirements and conditions are met for at least one tenancy, then the whole property is eligible for the land tax rebate.

Landlords may apply for the land tax rebate through the Office of State Revenue from 14 April 2020 to 30 June 2020.

If you would like advice or require assistance, please contact Hickey Lawyers on (07) 5574 1000.

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