Article By: Marissa Kinred, Lawyer Cappello Rowe Lawyers Sydney

Landlords in NSW who agree to reduce rent, for business and residential tenants experiencing COVID financial distress, may be eligible for land tax refunds.

The refunds only apply specifically to properties where it can be demonstrated that the tenant meets the test for financial distress and the rent reduction is in response to that distress.

COVID related financial stress for a residential tenant is a 25% reduction in the household’s income due to COVID.

COVID related financial stress for a commercial tenant is a 30% drop in revenue due to COVID (and only applies for business tenants with an annual turnover of up to $50 million).

Where it applies, refunds of up to 25% of the landlord’s 2020 land tax liability (depending on the amount of the rent reduction) will be available.  The rent must be reduced by at least the amount of the land tax reduction.

Revenue NSW is currently working on the application process. Until then, what documentation is required to demonstrate the tenant’s financial stress is not known but indications are this may be:-

• an accountant’s letter; and/or
• BAS statements; and
• evidence the rent was reduced because of COVID financial distress.

If you have any questions, or require any assistance negotiating with your tenant and obtaining tax relief contact our Property team on 6962 3433 or via email at info@cappellorowe.com.au