2020 Land Tax COVID-19 Relief – Guidelines

8. May 2020

About the program
The NSW government have introduced new measures to help provide relief for landowners of residential and commercial landowners who provide a reduction in rent to a tenant who is experiencing financial distress as a result of the COVID-19 crisis.

The COVID-19 land tax relief is intended to reduce a landowner’s land tax payable for 2020, by up to 25% for a taxable parcel of land where rent relief has been given to the tenant who occupies the land.

Landowners whom are eligible for the reduction may also defer their land tax payments by up to three months.

Reduction in land tax payable
If you are eligible, you will receive a reduction in your land tax payable for the 2020 Land Tax Year. Subject to the terms provided in the guidelines below.

The reduction will be the lesser of:

  • the amount of rent reduction provided to a tenant for any period between 1 April 2020 and 30 September 2020,
  • 25% of the land tax attributable to the land leased to that tenant.

Land tax attributable to a parcel of land is calculated as follows:

Taxable value of the land divided by aggregate taxable value of all parcels of land, multiplied by landowners’s 2020 land tax liability.

If you haven’t completed payment of your land tax before 2020, the relief will reduce or offset the amount you have left payable. If you have already paid your land tax for 2020, the reduction can be refunded to you.

3 month deferral of outstanding land tax
If you are eligible for this program, and receive a reduction, you’ll also be able to have your outstanding land tax payments deferred for up to three months

Eligible criteria
You will be eligible if:

  • you’re leasing a parcel of land to:
    – a commercial tenant, who has an annual turnover of up to $50 million, or
    – a residential tenant
  • the tenant is in financial distress as a result of COVID-19,
  • you reduce the rent of the affected tenant for any period between 1 April 2020 and 30 September 2020, and
  • for 2020, you have land tax attributable to the parcel of land leased to that tenant.

Financial distress
A tenant is considered to be in financial distress where:

  • for commercial tenants – there is a reduction in turnover compared to a previous comparable period of 30% (or more),
  • for residential tenants – there is a reduction in household income of 25% (or more).

You are responsible for verifying that your tenant is in financial distress.

Rent reduction
In order to be eligible, the rent reduction must not be required to be paid back at a later date. If a reduction in rent is provided, but is required to be paid back at a later date, this is considered to be a deferral of rent and will not be considered as a reduction of rent under this program.

If you are not eligible for the reduction in land tax or a deferral in land tax repayments under this program, but are experiencing difficulty in paying, you can still apply for a payment plan, to extend your payment due date. Click here to apply.

How to apply
To apply for the 2020 land tax COVID-19 relief, you will need to do so via Service NSW. Click here to access the application to apply for the program.

You will need the following too complete your application:

  • MyServiceNSW Account
  • Land Tax Client ID (can be found on your land tax assessment notice in the top right corner of the front page)
  • Land Tax Correspondence ID (can be found on your land tax assessment notice in the top right corner of the front page, under the Land Tax Client ID)
  • Land details for the parcel of land you are applying for the relief for
  • Supporting documentation to demonstrate eligibility for the program
    (examples of supporting documents include, but are not limited to:
    – to demonstrate that your tenant is in financial distress, as defined in the guidelines provided by Revenue NSW. (eg. your tenant’s financial statements, a letter from their accountant or property manager etc.
  • Your tenant’s permission to share their information with Revenue NSW.

Should any additional evidence be required to help establish the eligibility or validity of an application, Revenue NSW will contact the applicant directly.

Revenue NSW have advised that their aim is to process applications on a 30 day turnaround.

Other conditions
If you are applying for this program, once you have submitted the application, you must notify Revenue NSW by submitting an amended application as soon as possible, if there are changes in your circumstances or eligibility for this program. This includes a change in tenant or a change in rent during this period for which an application has been submitted.

An amendment to an application may result in a change to the amount of reduction in tax previously provided, under this program.

Any reassessment of a 2020 land tax liability that occurs after a reduction in land tax previously provided to you under this program.

Applications submitted for the 2020 Land Tax COVID-19 relief will be subject to potential compliance review for legitimacy.

Eligibility of both landowners and tenants can be reviewed to confirm that relief under this program has been submitted correctly.

Providing false or misleading information in an application for this program, or not notifying Revenue NSW of any changes in your circumstances, may result in a land tax reduction under this program being revoked. It is also an offence to provide false or misleading information and penalties may apply.