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New Land Tax Relief Queensland

 

The Queensland Government has announced land tax relief, still to be legislated, that includes;

  • land tax rebate 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
  • a 3-month deferral of land tax liabilities for the 2020-21 assessment year.

In alignment with the National Cabinet’s recommended principles for Lease Agreement negotiation during the COVID-19 period, the Queensland Government treasury has published a code of principles that landlords must commit to comply with to be eligible for land tax relief. According to the State Treasury website (https://www.treasury.qld.gov.au/budget-and-financial-management/revenue-and-taxation/leasing-principles/);

 

If you are a residential landowner, the principles are as follows:

  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
  2. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
  3. You will 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. You will 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. You will allow a tenant to refuse entry for non-essential reasons, including routine repairs and inspections, particularly if a member of the household has a higher risk profile if exposed to COVID-19.

 

If you are a commercial landowner, the principles are as follows:

  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
  2. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
  3. You will not increase rent, except where rent is linked to turnover;
  4. You will not penalise a tenant who stops trading or reduces opening hours;
  5. You will not charge any interest on unpaid or deferred rent; and
  6. You will not make a claim on a bank guarantee or security deposit for non-payment of rent.

 

In addition to these principles, the Prime Minister announced a mandatory code of conduct for small and medium enterprise commercial tenancies on 7 April 2020.  The Palaszczuk Government will consult with stakeholders on the development of systems and implementation of the code in Queensland. Compliance with this code is not a requirement to receive land tax relief, but landowners with small and medium enterprise commercial tenancies are advised to familiarise themselves with the code. Visit www.australia.gov.au for further information.

 

Eligibility is assessed on a per property basis. Qualifying for one property will not provide blanket relief for all property owned.

 

Eligible properties include

  •  Those with tenants whose ability to pay the normal rent is affected by COVID-19
  •  Empty, but available, properties that a tenant can’t be secured for due to COVID-19

 

In regards to eligibility, one major point to be aware of that is mentioned on the Queensland Government website (https://www.qld.gov.au/environment/land/tax/covid-19) is a requirement that “You will provide rent relief to the affected tenant(s) of an amount at least commensurate with the land tax rebate.” If you are not already providing reduced rent to affected tenants, you would need to in order to obtain this rebate.

 

This program will provide some cashflow relief for eligible landowners, with a 25% refund of paid land tax and a deferral of the next land tax bill. Applications are to be lodged via OSR Online.

 

Remember, we are here to help. If you wish to discuss your financial position and the eligibility of your business in regards to these relief measures, do not hesitate to call us 07 3210 5500 or email one of the partners:

 

Darren Laarhoven: D.Laarhoven@uhyhnseq.com.au

Lauren Steinheuer: L.Steinheuer@uhyhnseq.com.au

Reece Jory: R.Jory@uhyhnseq.com.au

Malcolm Barkle: M.Barkle@uhyhnseq.com.au

Dean Vane: D.Vane@uhyhnseq.com.au

 

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