Speaking after the Victorian government announced land tax relief measures for SMEs, VACC CEO Geoff Gwilym said that although this was welcomed, bigger employees such as dealerships “make an incredible impact” on Victoria’s economy and the relief should be extended to them.
The land tax relief is part of a $500 million package aimed at supporting landlords and tenants. Under its guidelines, a landlord may be eligible for a 25 per cent reduction on their property’s 2020 land tax bill if they offer rent relief to tenants impacted by COVID-19.
To be eligible, the property must be rented to a tenant with an annual turnover of up to $50 million, and additionally the tenant must be eligible for the JobKeeper payment.
However, landlords of properties rented to tenants with an annual turnover of more than $50 million will receive no support.
Mr Gwilym said that it was unfortunate that 70 per cent of vehicle dealers will miss out on this support.
“This is support that they so desperately need right now. These are larger businesses but they aren’t the ‘big end of town’, so are falling through the cracks in terms of government assistance. This needs to be addressed,” he said.
The VACC said the Stage 3 restrictions, designed to help slow the spread of COVID-19, have had widespread economic consequences for large businesses and SMEs alike, and governments need to recognise this.
Geoff Gwilym
“VACC agrees with Victorian premier Daniel Andrews that we all need to be working in partnership – landlords working with tenants, tenants working with landlords, and with the government willing to help those most in need,” Mr Gwilym said.
“But right now, some of those most in need are not being supported by this well-meaning land tax reform package.”
The chamber said it is now calling on the Andrews government to continue to support all Victorian businesses in need and to revise thresholds on relief measures.
All state and territory governments have announced a temporary reduction in land tax for commercial properties.
Queensland and NSW have announced a discount of up to 25 per cent on land tax for the 2020 calendar year as part of packages worth $400 million and $440 million (half for residential renters) respectively. It is on the condition that the discounts are passed on to tenants in the form of rent relief.
Both states will also offer a three-month land tax deferral for the coming tax year.
The eligibility criteria is a turnover of $50 million or less. These businesses in NSW must have also recorded a reduction of at least 30 per cent in revenue as a result of COVID-19. Queensland has not specified the eligibility criteria for commercial tenants.
Victoria has offered a $500 million package including up of $420 million in land tax relief for commercial and residential tenancies.
In the ACT, landlords can receive a land tax rebate if they reduce rent paid by tenants by at least 25 per cent for up to six months. It will match half of the rent reduction to a maximum of $2600 over six months or $100 a week.
Tasmania has legislated a freeze on evictions and any notice to vacate issued by a landlord to a tenant is of no effect until June 30, 2020, though this could be extended.
Western Australia has followed Tasmania with legislation for a six-month freeze on evictions. It also prohibits rent increases during the current period and agrees that fixed-term tenancies close to ending will continue as a periodic agreement.
The national code applies to both landlords and tenants and includes landlords who are not able to terminate leases or draw on their tenants’ security, tenants honouring their leases, and landlords reducing rent proportionate to the trading reduction of the tenant’s business.
Under the code, waivers should make up at least 50 per cent of any rent relief provided with deferrals to make up the balance under the code.
South Australian businesses are already able to defer paying land tax on their third- and fourth-quarter instalments for up to six months.
By Neil Dowling
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