VIC Victoria's turn COVID-19 residential rental package

Victorian Government announces $500m package for private rental sector

 

Pretty light on detail

 

Not really much of a saving for me personally.
25% land tax savings would be about $200. Half a weeks rent.
Which would be negated completely by reducing rent, in turn affecting my LL insurance claimability.

Might as well just keep rent as is, claim LL insurance, and try to get any outstanding amount back in court after 6 months.

 

Latest announcement for Victoria

Limited information at the minute, but looking forward to seeing how this unfolds. From what it looks like if the reporting is accurate:

• Moratorium stands (except in some cases, doesn't say what though just yet)
• Land tax concessions and deferrals
• $2,000 payable direct to the landlord if tenants are in hardship, they must qualify and it's after negotiations between tenants and landlords
• Pausing rent increases for 6 months

That's not bad to be honest. Thoughts?

 

Where did you get the information for point 3?

 

The land tax concession will pay the rent for about 1 day. It looks good on the news, but it's totally worthless.

The $2,000 might pay the rent for a month, but it still means that there's ways that tenants can get the other 5 months for free.

It's also only available if the two parties can negotiate in good faith. What happens when the tenant simply refuses to negotiate?

 

I don't have a rental property in Victoria but IMO the land tax concession is worth basically nothing and I hope this idea is not brought into other states plans although something tells me NSW might already have something along the same lines.

 

Point 3 was in news sources and the announcement via Dan Andrews himself:

Victorian Government announces $500m package for private rental sector

 

Yes, land tax concessions would be worth a couple of dollars a week for me and we don't know if there is an obligation to drop rent by a certain amount potentially much greater than in order to get it (like in ACT). Rates relief would be better as everyone gets it and more so the smaller investors but understand it's more difficult outside of ACT with all the councils involved.

Still seems to suffer from the same key issue that all the polticians are ignoring, that a landlord who drops rent to an affordable amount still takes the risk that the tenant won't pay that and still can't be evicted (I did see something in the nsw announcement to try to mitigate that), but it really annoys me that the politicians don't seem to be seeing this key flaw that is going to mean landlords will have little incentive to negotiate as they only take further risk of losses by dropping rent.

 

From memory the QLD announcement was the same/similar re 25% land tax concession. Not sure about NSW.

It's not necessarily going to be a huge benefit for a lot of people, but it's better than nothing. The positive part is there's NO allowance in any state so far that I have seen (feel free to correct me) that means tenants aren't liable for rent or liable to pay back what is owed if it's in arrears. It's not free rent and all of these announcement are designed to protect those truly impacted, not allow for anyone to take the owners for a ride.

QLD Premier was quite clear that if parties refuse negotiation (either party) then you still have the option of QCAT and I think most states will follow suit. But as the information coming out is so fresh and hasn't passed it means that there's still some confusion and questions surrounding the processes for each state - fortunately it looks like in the next week or two a few states will have their packages passed and the information can flow through about what the process will look like.

All announcements have been very clear that rent is still payable and all of these options are only available to those truly impacted by the virus - not just anybody. The ones trying to take you for a ride I don't believe will be looked upon well in a court setting.

 

Permanent rent waivers in Qld. I don't think NSW is this extreme and hope they don't introduce Queensland's stance in Victoria.

 

Here is the link for Victorian consumer affairs website. Only had time for quick look and judging by that it is still quite light in details.

Coronavirus (COVID-19) and your rights

 

Under "What if my landlord will not agree to a rent reduction?", it says that
"Accredited mediators will help you and your landlord agree on a payment plan. If you still can’t reach an agreement, the disputes resolution team will be able to issue a binding order, setting out the relevant terms."

So the "disputes resolution team" is going to decide the rental amount?

 

Apparently. I'm very sceptical that this is actually a way lessors would be forced into a rent reduction without their consent though.

 

It's not really clear to me from that whether they are saying they will set the rent amount or whether they will set a payment plan (as in a way in which the tenant will eventually pay back the rent)?

 

Realistically everything right now is pure speculation.

VCAT can already alter the terms of fixed agreements. So it may be possible that this "could" happen, but I don't think it would be fair as rent is set based on market conditions, not tenants affordability. Enforceable payment plans however I feel are more likely - but we just need to wait and see for now.

 

Is there any info yet on how the land tax concession works, how we qualify for it...

is it as simply as if say eg. landlord has a land tax bill for a property of $2000...
Will that $2000 be waived, if a landlord and tenant reach a $2000 discount Spread across the next 12 months.....

 

Looks like 25% waiver IF you negotiate with your tenant, plus the remaining 75% deferred until 2021. But final details will be released once cabinet has met, so it could very well change.

Some further info now on CAV regarding tenancies too. But not really clarified much more than earlier. So we wait.

 

once again, majority of investors pay none/ minimal land taxes. Looks good on news that the government did something pretend to help landlord. Sorry, they don't