Commercial Property Landlords and Tenants Tax 2020

The COVID-19 shutdown has caused a reduction in rental income for many commercial and residential investors across Australia. Thankfully, they’re now preparing to maximise negative gearing deductions to soften the blow of their property expenses in the weeks leading-up to lodging their tax returns on 1 July 2020.

To support property investors through this global pandemic, each state and territory around Australia has announced different measures for land tax concessions. These packages will offer eligible businesses or landowners who’ve experienced financial difficulty due to COVID-19 some relief measures in the form of a land tax waiver or a reduction in liability.

The proposed relief package in Queensland for 2019-20 includes a land tax rebate which reduces liabilities for land tax by 25% for eligible properties assessment year and a waiver of land tax surcharges for any foreign entities. In contrast, the 2020-21 assessment year will see land tax liabilities deferred for three months.

These relief packages apply to all types of taxable property, regardless of use, as long as you meet all of the eligibility criteria below:

All or part of the property is currently tenanted OR available for lease;

AND your tenant/s are unable to pay rent normally OR you are unable to secure tenants due to the COVID-19 shutdown;

AND you will provide affected tenant with rent relief proportional to the land tax rebate amount OR you require the land tax relief to meet financial obligations if the property is untenanted;

AND you comply with the Queensland Treasury’s recently announced updated leasing principles, even if relevant leases are not regulated.

While you must apply for access to the land tax rebate, the Queensland Government will automatically reassess land tax for 3-month deferral or the foreign surcharge waiver. Provided that eligibility has been met, all of the currently available information says that the land tax rebate will not need to be repaid.

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