NSW $1500 landlord assistance - a bit confused

Discussion in 'Property Management' started by giraffez, 18th Jul, 2021.

Join Australia's most dynamic and respected property investment community
Tags:
  1. giraffez

    giraffez Well-Known Member

    Joined:
    4th Dec, 2015
    Posts:
    595
    Location:
    NSW
    My property is up for lease renewal, im not going to ask for a rent increase but I’m almost expecting the tenants to be asking for a rent reduction because of the $1500 support announced.

    I’m a bit confused about who is applicable. I read the fair trading website 3 times but still unclear. Is it saying that if there is a rent reduction in good faith that the support is available ?

    But then it goes on to say that
    “The amount for each landlord will be capped at the reduction that is passed onto the tenants, or $1500, whichever is the lower.”

    so if i agree to reduce rent in good faith the above seems to indicate that the $1500 is to be passed on to the tenants? I don’t understand this part, the landlord is reducing rent and out of pocket yet the $1500 is to be passed on to the tenants? I just want to clarify how this works.

    This $1500 support equates to around a $30 per week reduction in rent before the landlord is out of pocket. I’m almost expecting the tenants to be asking for this regardless or whether they have been impacted. … I’m not very clear who is eligible. For tenants who are NOT impacted from covid restrictions but just want a reduction in rent because this is available and they can, is this $1500 available for everyone regardless?
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,101
    Location:
    Sydney or NSW or Australia
    If it's a new lease/renewal it won't apply as that is a new negotiation.
     
  3. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,448
    Location:
    Sydney
    My understanding is that the tenant should prove they are covid impacted - which means having lost 25% of their income.

    I also differentiate between the market rent when it comes to a renewal, and a temporary reduction due to the current covid restrictions. If tenant is eligible for a temporary reduction, document this and use it for a claim.

    Your renewal should be based on the market instead of a blanket reduction.
     
    giraffez and Michael Mitchell like this.
  4. boganfromlogan

    boganfromlogan Well-Known Member

    Joined:
    10th Jan, 2017
    Posts:
    3,332
    Location:
    Brisbane
    Can u just roll over to monthly at renewal? Then it's not a new negotiation.

    Pass to tenant just means landlord can't pocket the cash. Ie the rent reduction must be offset by the 1500. Reduce rent 1500 by say $100 x 15 weeks. Your loss is 1500 subsidy to u is 1500. Tenant is beneficiary.

    Does that seem right?
     
    giraffez likes this.
  5. Michael Mitchell

    Michael Mitchell Well-Known Member

    Joined:
    17th Sep, 2018
    Posts:
    1,378
    Location:
    Brisbane (Nundah)
    Why doesn’t the Gov. just give it to the Tenant so the Tenant can pay their rent and stop expecting the Lessor to take a loss and be a charity.

    On paper when you take debt into account to give a net position, I bet a lot of Lessors are poorer than their Tenants’s, working more hours to keep it altogether, doing it with no handouts and not asking for any either, but woe is me if you’re a Tenant :rolleyes:.
     
    craigc, datto, 2FAST4U and 1 other person like this.
  6. giraffez

    giraffez Well-Known Member

    Joined:
    4th Dec, 2015
    Posts:
    595
    Location:
    NSW

    I was actually thinking whether I should just roll over to periodic so not to preempt the tenant to start this negotiation. But I have always read in this forum to always opt for a lease.

    Sorry, what does this mean? Say if the market rent was $500, and I agree a reduction of $20. My lease renewal should still say $500 on paper right? Not $480.

    Yes this is such a better way!!! So incredibly inefficient doing it via the landlord in a round about way. Waste everyone’s time.
     
  7. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,448
    Location:
    Sydney
    Yes exactly, do your lease agreement as usual. When we agree to a rent discount, we credit the tenants eg $100, and put a clear note "$20 rent reduction for 5 weeks due to Covid restrictions" on the ledger. Last time we used this as supporting evidence for our owners to claim the land tax rebate.
     
    giraffez and Michael Mitchell like this.
  8. JoannaK

    JoannaK Well-Known Member

    Joined:
    2nd Jul, 2015
    Posts:
    86
    Location:
    Sydney

    The $1500 is assistance for the landlord, not the tenant, and it's to assist the landlord with any assistance they give the tenant from 14 July onwards.

    Assistance for the landlord can take 2 different forms. First way is by application - this assistance is capped at $1500 per residential tenancy up to the value of the total assistance a landlord gives to their tenant. So, if the landlord provides a total of $800 assistance to their tenant, then they are entitled to claim back $800 maximum.

    The second way is via a land tax rebate, you either get a rebate on your landtax up to the amount you've assisted your tenants, or you get rebated your full landtax bill, which ever is the lower.

    Tenants can claim income assistance via other means.

    Property managers will be able to apply for the $1500 assitance on behalf of the landlord and apply it directly to the rent ledger.

    Further, a tenant must continue to pay at least 25% of the rent, and be able to effectively demonstrate a loss of 25% or more of the household income (as compared to a pre-defined 4 week period in June) in order to qualify for any sort of rent assistance from the landlord.

    I hope this helps.
     
    Last edited: 20th Jul, 2021
    Michael Mitchell likes this.
  9. Rachel80

    Rachel80 Member

    Joined:
    13th Apr, 2016
    Posts:
    14
    Location:
    Sydney
    To Joanna

    Good afternoon...I just wonder that can we apply this landlord financial assistance now or not yet ??
     
  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    The landlord must lose income or at least $1500 to get $1500. No landlord makes a profit on this. If you dont have COVID impacted tenants its a matter to possibly ignore. Too many look at what;s offerred and the true position is you should start with the tenant issue and work back towards a claim IF its relevant. If a tenant fake claims to be COVID impacted then you just got scammed.

    Residential tenancy support package
    contains all details of all support and impacts. Given that the reduced rent must first be determined I would imagie claims will take time to be made AFTER negotiation etc
     
    Dan Wood and Michael Mitchell like this.
  11. PetaMc

    PetaMc New Member

    Joined:
    26th Jul, 2021
    Posts:
    1
    Location:
    Macarthur
    Can someone tell me where landlords go to apply for the $1500 grant. My landlords have reduced the rent for the tenant but cannot find where to apply for this particular payment.
     
    Michael Mitchell likes this.
  12. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,448
    Location:
    Sydney
    It doesn't look like the claims system is in place yet.

    The Fair Trading website says:

    "An online process is being set up now to allow landlords or agents to claim the assistance which is paid direct to the landlord or their managing agent. The system will take a couple of weeks to be available. Fair Trading will update agents and landlords as soon as it is available through the e-newsletter, Property Matters or you can check back here later."

    Link: Residential tenancy support package
     
    Michael Mitchell likes this.

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia