The Tax Institute Blog

COVID-19 Victorian land tax relief measures for Victorian landlords

Written by The Tax Institute | Mar 15, 2021 9:00:00 PM

Towards the end of 2020, the Victorian Government announced the extension of land tax relief measures as part of its efforts to help the State recover from the financial impact of COVID-19. These measures include 2020 and 2021 land tax reductions, as well as deferral of payment due dates.

We have summarised some of the key points to know about land tax reductions for commercial landlords and owner-occupiers below. Please note there are separate relief measures for residential landlords.

Who is eligible?

Applications are currently open for:

  • landlords of properties with multiple tenancies (residential and/or commercial); and
  • residential landlords.

In the second announcement made in December 2020, the Victorian Government extended the land tax reduction and deferral for commercial landlords of properties with a single tenancy, and owner-occupiers, though applications are not yet open for these property owners.

Summary: key dates and eligibility for Victorian land tax relief

Prepared by: James Hamblin, Chair of the Victorian State Taxation Committee

Land tax relief

Application cut-off

Threshold requirements

Turnover/JobKeeper requirements

Supporting documentation
2020 Land Tax Reductions

Landlords -

Reduction of up to 50% of 2020 land tax

31 March 2021

Note: If a landlord has already applied for the original 25% concession, a separate application is required for the 'up to additional 25% concession'.

Landlords must provide relief that complies with the Victorian Government's Commercial Tenancy Relief Scheme and:

  • to qualify for land tax relief of 25% ('original 25% concession') – provide a rent reduction in respect of the period between 29 March 2020 and 29 September 2020, with such reduction being at least equal to the amount of the available land tax relief; or
  • to qualify for land tax relief of up to an additional 25% (i.e. total relief of up to 50%)2 – meet the 'original 25% concession' criteria and also provide a 50% or more outright rent waiver of at least 3 months’ rent to eligible tenants (these months must fall between 29 March 2020 and 31 December 2020 but need not be consecutive).

Landlords must also ensure the following are satisfied:

  • tenant must have annual turnover of no more than $50 million;1 and
  • tenant must be eligible for and receive the JobKeeper payment.

Supporting documentation includes:

  • lease agreement dated prior to the pandemic;
  • written evidence of the rent reduction for the original concession, and/or of the rent reduction for the additional concession (if applicable);
  • declaration from landlord that rent relief complies with Victorian Government's Commercial Tenancy Relief Scheme; and
  • declaration from the tenant that the tenant meets the relevant criteria.

Owner-occupiers -

Reduction of 25% of 2020 land tax

 

31 March 2021

 

Owner-occupiers must, in the 2020 land tax year:

  • carry on an active business under an ABN at the relevant property (note this does not include certain business activities e.g. construction or development work on properties for the purposes of sale); and
  • own the relevant property and business either through a company or trust which is directly controlled by the owner-occupier.

Generally, owner-occupiers must ensure the business:3

  • has an annual turnover of no more than $50 million; and
  • is eligible for and receives the JobKeeper payment.

While the SRO may not necessarily require supporting documentation upfront, the following should be retained:

  • evidence of an active business on the relevant property; and
  • evidence of direct ownership of both the relevant property and relevant business.
2021 Land Tax Reductions

Landlords -

Reduction of 25% of 2021 land tax

 

30 June 2021

Note: If a 2020 concession application has been or will be made, a separate application is required for the 2021 concession.

Landlords must:

Landlords must also ensure the following are satisfied:

  • tenant must be eligible for and receive the JobKeeper payment between 1 January 2021 and 28 March 2021; and
  • tenant must have annual turnover of no more than $50 million.4

As per 2020 landlord land tax relief above.

 

Owner-occupiers -


Reduction of 25% of 2021 land tax

30 June 2021

Note: If a 2020 concession application has been or will be made, a separate application is required for the 2021 concession.

As per 2020 owner-occupier land tax relief above, but in relation to the 2021 land tax year.

 

Generally, owner-occupiers must ensure the business:5

  • has an annual turnover of no more than $50 million; and
  • is eligible for and receives the JobKeeper payment in the March 2021 quarter.

As per 2020 owner-occupier land tax relief above.

 

1 Turnover thresholds must generally be calculated on an 'aggregated turnover' basis, i.e. the turnover of the entity's connected entities and affiliates must also be included. Rules differ for entities operating a licensed pub, club or restaurants under certain liquor licences.

2 Total relief is capped at the lesser of 50% (excluding the absentee owner surcharge) and the amount of rent waived between 29 March 2020 and 31 December 2020.

3 As per footnote 1 above, also noting that a turnover reduction test (rather than JobKeeper requirement) applies for entities operating a licensed pub, club or restaurants under certain liquor licences.

4 As per footnote 1 above.

5 As per footnote 3 above.

Download this table

 

How to apply for the land tax reduction and deferral

Most landlords who satisfy the eligibility criteria can apply for the land tax reduction through My Land Tax.

Landlords with multiple tenancies in a residential or commercial address must apply through the Coronavirus land tax relief - Multiple tenancy properties SmartForm and complete a Multiple Tenancy Schedule to accompany the application.

Other things to remember:

Reapply for 2021 land tax relief

If you already received the 25% reduction on your 2020 land tax, you may still be eligible and apply for the 2021 land tax relief (provided you meet all the necessary criteria). However, you must complete a separate application and you may need to provide additional evidence to support this year’s application.

Cancel AutoPay Instalments

If you pay your land tax through AutoPay Instalments and have these set up for 2021, you’ll need to log in to AutoPay and cancel them if your land tax relief application is granted.

If you forget to do so, your AutoPay direct debits will continue, whether or not you are eligible for land tax relief.

 

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