NSW COVID: no evictions for 60 days

Discussion in 'Property Management' started by Simon Hampel, 14th Jul, 2021.

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  1. Simon Hampel

    Simon Hampel Founder Staff Member

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    I missed the presser this morning - but I saw this on the ABC live blog:

    Live: Three people under 40 in intensive care as Sydney residents urged to stay home

    Help for struggling NSW tenants

    State treasurer Dominic Perrottet:

    "Whether you are a commercial tenant, residential or retail tenant, there will be no lockouts or evictions. As a residential tenant there will be no forced evictions for 60 days," he says.

    "Mandatory mediation is in place as well as support. I encourage all landlords to speak to their tenants and if your tenant is struggling, to engage with them in a payment plan, a reduction in rents and we will provide an equivalent offset in terms of your land tax obligations.

    "And for landlords in the residential space who do not pay land tax, we will provide up to $1500 for you to pass that onto your tenant to help them through this difficult period."
    ​
    Will be interesting to find full details about this new directive.
     
    Simon Hampel, 14th Jul, 2021
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    Michael Mitchell likes this.
  2. Simon Hampel

    Simon Hampel Founder Staff Member

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    COVID-19 fighting fund to protect businesses, save jobs and support NSW through lockdown

    Residential tenants will have greater protection with a targeted eviction moratorium. Residential landlords who decrease rent for impacted tenants can apply for a grant of up to $1,500 or land tax reductions depending on their circumstances.

    Commercial and retail landlords will need to attempt mediation before recovering a security bond, or locking out or evicting a tenant impacted by the Public Health Order.

    Commercial, retail and residential landlords liable for land tax will be eligible for a land tax concession where they reduce the rent of their tenant.

    ...

    Key components of the 2021 COVID-19 package include:
    • A capped grant of up to $1500 for residential landlords who are not liable to pay land tax who reduce rent for tenants estimated at $210 million;
    • Land tax relief equal to the value of rent reductions provided by commercial, retail and residential landlords to financially distressed tenants, up to 100 per cent of the 2021 land tax year liability;
    • Introduction of legislative amendments to ensure a short-term eviction moratorium for rental arrears where a residential tenant suffers loss of income of 25 per cent due to COVID-19 and meets a range of criteria.
    • No recovery of security bonds, or lockouts or evictions of impacted retail and commercial tenants prior to mediation;
    ​
     
    Simon Hampel, 14th Jul, 2021
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    Michael Mitchell likes this.
  3. Paul@PAS

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

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    The devil will be in the details. These media announceents are fine but I suspect the $1500 will be sometime off before anyone sees it. I suspect but cant confirm that rent reductions always need to be proven and it will be a chicken and egg issue. ie drop their rent or here is no $1500... And what does UP TO $1500...mean ?

    Landlords seem to have NO net benefit from this concession without giving up something eg rent and that could exceed the $1500 Its not a free kick. Less a"grant" than it is a semi compensation scheme.

    I would argue most owners would be hoping their tenant is not impacted so rent is unchanged and this then is a matter to ignore. Would argue for those subject to land tax a land tax credit would be preferable to giving money to a tenant. And may even be the default position.

    I have concerns about the number of tenants who will play it on and expect a handout (they get no state handout !!) like all owners are "entitled". Reality is likley very few may be. ...Pm will have tough time managing this one and actually will lose fees to manage it ...for free ?? Agents wont want it. How do tenants prove they are covid impacted affecting rent ? Then landlord must reduce rent...Then is it a land tax concession as the #1 priority (my guess) ....How many weeks are they impacted ? is it a weekly rental credit or is this a "one off" so drop the rent assuming 4 weeks by $375 a week or its it $187.50 or just a one off $1500 of what they owe (arrears ??) .....Then what happens if it continues. Landlord gets burned by state govt scheme and now has less rent and arrears that are lower for any LL insurance if its never paid. ...How is that a rent reduction esp if lockdown ends in 2 weeks...or is it 8....what happens if its 10....Or longer.....

    Yet to also determine if the ATO considers the grant assessable income. I suspect it will be since it replaces receipt of rent. So why bother ?? No incentive for resi landlords really. Other than to knowing their tenant negtiated a rent reduction which could end up being a issue.
     
    Paul@PAS, 14th Jul, 2021
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    Michael Mitchell likes this.