Following the recent announcements by the National Cabinet, the Queensland Government has revealed a $400 million dollar land tax relief package to support landlords and tenants during the COVID-19 pandemic.

What does the COVID-19 land tax relief package include?

One or more of the following measures are available for eligible commercial and residential landlords:

  • a Land Tax Rebate reducing land tax liabilities by up to 25% (3 months) for the 2019 to 2020 assessment year for eligible properties. This is a non-repayable refund for the period;
  • a Foreign Surcharge Waiver of the 2% land tax foreign surcharge for foreign entities for the 2019 to 2020 assessment year; and
  • a 3-Month Deferral of land tax liabilities for the 2020 to 2021 assessment year.

You are not required to apply for the 3-Month Deferral or the Foreign Surcharge Waiver for the 2020 to 2021 assessment year. The Office of State Revenue will reassesses land tax and provide a refund where payments have been made already.

PLEASE NOTE: If you are eligible for the Land Tax Rebate for the 2019 to 2020 assessment year, you will need to apply here by 30 June 2020. Our office can assist with further details if needed.

Who is eligible for the Land Tax Rebate?

The Queensland Government has outlined that the following landowners are eligible:

  1. You are a landowner who leases all or part of a property to one or more tenants 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 Rebate; and
  • you will comply with the Leasing Principles (see below) even if the relevant lease is not regulated.

OR

  1. You are a landowner with all or part of your property currently available for lease and all 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 even if the relevant lease is not regulated.

How does the Land Tax Rebate apply across multiple properties?

The Land Tax Rebate will only apply to each property that meets the eligibility conditions. It will not necessarily apply against your whole taxable land portfolio.

How does the Land Tax Rebate apply if the tenant only leases part of one property?

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.

How do I use the Land Tax Rebate?

The Queensland Government expects you to apply the Land Tax Rebate firstly to rent relief for tenants. Any remaining relief can then be applied to the landlord’s own financial obligations/debts.

How do I apply for the Land Tax Rebate?

1.     Log onto OSR Online (or create an account if you don’t already have one).

Your 2019–20 land tax assessment notice will have the details of your land holdings. (If you have not received your notice, you can find it under the Assessments tab once you log onto OSR Online).

2.     Select My Land.

3.     Select Manage details.

To receive the rebate, you must include or update your contact details (including email and telephone number) and bank details so that we can contact you if necessary and pay the rebate into your nominated bank account.

4.     Select Manage exemptions then Lodge new exemption.

5.     Select COVID-19.

6.     Complete the application by certifying your eligibility and selecting the applicable land parcel(s).

7.     Complete the declaration.

Noting the references to “certifying your eligibility” and completing a declaration, it does not appear that the Office of State Revenue will require proof of certain facts or steps having already been taken in order to obtain the Land Tax Rebate. Presumably, penalties will apply for false statements etc.

What are the new Leasing Principles?

To be eligible for the Land Tax Rebate, the landlord “must commit to comply with” the following Leasing Principles. These will be introduced into Queensland law. Please see here and/or our summary below:

Commercial Landlords

1.     negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;

2.     not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;

3.     not increase rent (except where rent is linked to turnover);

4.     not penalise a tenant who stops trading or reduces opening hours;

5.     not charge any interest on unpaid/ deferred rent; and

6.     not make a claim on a bank guarantee or bond for non-payment of rent.

Residential Landlords

1.     negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;

2.     not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;

3.     not end a tenancy for any reason other 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.     not charge break-lease-fees for tenants who need to end a fixed term tenancy early due to the financial, health or personal safety impacts of COVID-19; and

5.     allow a tenant to refuse landlord/agent entry for non-essential reasons (eg. routine repairs and inspections) particularly if a member of the household has a higher risk profile if exposed to COVID-19.

Please note – the Leasing Principles are not the same as the Federal Government “Mandatory Code of Conduct for Small and Medium Enterprise Commercial Tenancies” announced on 7 April 2020 and yet to be implemented into Queensland Law. Compliance with the Code of Conduct is not a prerequisite for the Land Tax Rebate.

 Important Notice: The information in this article is current as at 15 April 2020. It is for general purposes only, and reflects a rapidly-changing situation. The actual laws enacted by the State Government may vary the effect of the policy as set out in this article. Consequently, this article is not intended to constitute legal advice.

 If you require assistance with determining your eligibility for the land tax relief, please contact us on 07 3392 0099.

Written by Sam Rose, Graduate and  Julian Creagh, Associate, Wilson Lawyers.