Land tax relief is here in QLD

On Wednesday 22 April 2020, the Queensland Parliament sat for the first time in over a month in an effort to pass emergency measures aimed at supporting Queenslanders during the COVID-19 pandemic.

Some of the measures passed include the following:

  1. $300 million aimed at relieving the cost of living which includes $200 credit for all 2.1 million households to offset water and electricity costs;
  • $2.5 billion aimed at supporting Queensland businesses, which includes:
  1. Payroll tax relief;
  2. Relief for businesses renting Government premises;
  3. Electricity rebates for small and medium sized businesses that consume less than 100,000 kw hours;
  4. Liquor licensing fee waivers; and
  5. Assistance offering support for large businesses once economic activity improves.
  • $400 million in land tax relief measures aimed at property owners.

The Land Tax relief measures are perhaps the most exciting announced as they are beneficial for property owners and tenants alike.

What are the Land Tax Relief Measures?

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

  • Land tax rebate aimed at reducing land tax liabilities by 25% for eligible properties for the 2019-20 assessment year
  • Waiver of the 2% land tax foreign surcharge for foreign entities for the 2019-20 assessment year
  • Three (3) month deferral of land tax liabilities for the 2020-21 assessment year

Who is eligible for Land Tax Relief?

If you are a landowner who leases all/part of a property to one or more tenants and the following allapply, then you may be eligible for land tax rebate:

  1. Ability of one or more of your tenants to pay normal rent is affected by the COVID-19 pandemic;
  2. You will provide rental relief to the affected tenant(s) of an amount proportionate to the land tax rebate you receive; and
  3. You will comply with the leasing principles.

Alternatively, if you are a landowner and all of the following apply, you will also be eligible for the land tax rebate:

  1. Your property is available for lease (either partially or wholly);
  2. COVID-19 has affected you being able to secure a tenant(s);
  3. You require relief in order to meet financial obligations; and
  4. You will comply with the leasing principles.

What are the leasing principles?

The leasing principles are ­a set of mandatory guidelines for residential and commercial landowners who are seeking consideration for land tax relief.

If you are a residential landowner, please see below for the principles that are applicable to you:

  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay rent is affected by COVID-19;
  2. You will not evict your tenant(s) if they are unable to meet their rental obligations due to COVID-19;
  3. You will not end a tenancy for any reason than on an approved ground – this does not include the tenant’s inability to pay rent or the end of a fixed term lease;
  4. You will not charge break lease fees due to tenants ending their leases early due to financial, health or personal safety impacts of COVID-19; and
  5. You will allow for tenants to refuse entry for non-essential reasons, which may include routine repairs or inspections.

If you are a commercial landowner, please see below for the principles that are applicable to you:

  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay rent is affected by COVID-19;
  2. You will not evict your tenant(s) if they are unable to meet their rental obligations due to COVID-19;
  3. You will not increase rent except in the case where rent is related to turnover;
  4. You will not penalise tenant(s) who stop trading or reduce their opening hours;
  5. You will not charge interest on unpaid or deferred rental payments; and
  6. You will not make a claim on a bank guarantee or security deposit for non-payment of rent.

It is important to note that these guidelines will be introduced into Queensland law in the near future. Additionally, while the Prime Minister announced a mandatory Code of Conduct for small and medium enterprise commercial tenancies on 7 April 2020, compliance with this Code is not a requirement to receive land tax relief in Queensland.

How do I apply for Land Tax Relief?

The Queensland Government had indicated that individuals do not need to apply for the foreign surcharge waiver or three (3) month deferral of land tax liabilities. They will reassess land tax to apply the waiver and provide a refund in cases where the amount for the applicable assessment period has already been paid.

There is, however, an application process for the land tax rebate which can be done on the OSR online website and involves making a declaration as to your eligibility. Applications for the land tax rebate are open until 30 June 2020.

If you require assistance in assessing your eligibility for the land tax rebate or any of the other land tax relief measures announced by the Queensland Government, please get in contact with our office on +61 (07) 3876 5111   for an obligation free consultation. We are also able to assist in drafting and negotiating new agreements between tenants and landlords and ensuring that they are mutually agreeable.

Written by

Kayleigh Whittaker, Senior Lawyer

NB Lawyers – Lawyers for Employers
kayleighw@nb-lawyers.com.au
+61 (07) 3876 5111

About the author

Kayleigh Whittaker is a senior lawyer on our Commercial and Property team who assists with Employment Law matters. With a high level of experience in commercial and retail leasing, voluntary and involuntary purchase and sale acquisitions property development and employee relations, Kayleigh provides practical advice to ensure smooth business transactions.

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