For the most up-to-date information on the latest developments on commercial, retail and industrial tenancies during COVID-19, watch our free COVID-19 Tenancy Relief Update webcast.
Commercial, retail and industrial tenancies
Code of Conduct
We now have an endorsed overall National plan with respect to the ‘National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles During COVID-19’ (Code), but are waiting on announcements from the States/Territories as they take steps to legislate to reflect the principles of the Code.
In a press conference on Monday 13 April, Victorian Premier Daniel Andrews alluded to the Victorian Government being in the course of preparation of rent-relief measures, which he did not elaborate on but said will be announced ‘soon.’
In the meantime, the New South Wales government is the first to table its plan, announcing on Monday 13 April that it is in the process of implementing the principles expressed under the Code for small to medium business and not-for-profit (SME) commercial and retail tenancies. The NSW Treasurer, The Honourable Dominic Perrottet MP, said that:
- the definitions and principles under the Code will be implemented in NSW by a regulation which is yet to be finalised and legislated;
- the regulation will be applicable to SME retail, industrial and general commercial leases;
- the regulation will incorporate the Code’s principle of proportionality, requiring landlords to provide tenants with rent relief proportionate to their reduction in turnover;
- the regulation will include a ban on termination of a tenancy for non-payment of rent, and a freeze on rent increases;
- the dispute resolution process under the Code will be overseen by the Office of the Small Business Commissioner, which will receive a $10 million increase in funding, together with additional staff.
Residential Tenancies
New South Wales is the first, and thus far only, State to announce a residential tenancy package, with Mr Perrottet also declaring that a further $220 million package will be provided to support both landlords and tenants in residential tenancies.
The plan will apply to residential tenancies where a tenant has lost a minimum of 25% of their income due to the COVID-19 pandemic, and will include:
- an obligation for landlords and tenants to negotiate an agreement before the landlord can seek a forced end to the tenancy;
- the NSW Civil and Administrative Tribunal to protect tenants from eviction until negotiations have concluded;
- a 6-month prohibition on evicting tenants for 60 days’ rental arrears; and
- any unpaid rent to accrue as arrears.
Land tax relief for commercial and residential landlords
New South Wales
- the government will provide $440 million towards land tax relief through waivers/rebates of land tax, to be split evenly between commercial and residential landlords;
- landlords will be eligible for a land tax waiver/rebate on condition that they pass any saving on to tenants who are financially distressed as a result of COVID-19;
- eligible landlords will be able to apply for a land tax concession of up to 25% of their 2020 land tax on relevant properties;
- landlords claiming the concession will also be offered a 3-month land tax deferral on any outstanding land tax.
Queensland
- landlords will be provided with a discount of up to 25% on land tax for the 2020 calendar year, subject to any savings being passed on to tenants in the form of commensurate rent relief;
- landlords with a vacant property currently available for lease are also eligible to apply for the discount;
- the planned introduction of a land tax surcharge applicable to foreign companies that own land is to be deferred;
- landlords will be offered a 3-month land-tax deferral for the coming tax year.
South Australia
Prior to the Code, South Australia had already established measures whereby businesses paying land tax on a quarterly basis are able to defer payment of their third and fourth quarter instalments for up to six months.
The other States/Territories
At the time of writing, the remaining States/Territories have yet to announce any proposed land tax relief for landlords.