Two new support programs will be available for real estate investors in New South Wales.
The government of New South Wales recently announced a property tax relief scheme for residential property owners who offer rent reductions to their tenants.
The device follows a similar program that was rolled out in May 2020 and lasted for one year. The program has received more than 17,200 applications and has provided relief of $ 186 million to date.
Both regimes also offered tax breaks to commercial tenants who provided rent assistance to their tenants.
Finance and Small Business Minister Damien Tudehope said the property tax relief program is demand driven and there will be no limit to the number of landowners eligible for government support.
"Landowners have told us they would like to help their tenants, but they also have bills to pay," Mr. Tudehope said.
"Providing financial relief will allow them to work with their tenants to provide rent reductions and alleviate some of the cost burden during the restrictions." "
How Can Homeowners Get Property Tax Relief?
Residential landlords applying for the program must rent property on their parcel of land to a tenant who has lost 25% or more of their household income due to the impacts of the COVID-19 pandemic.
To be eligible, they must have reduced the rent of the tenants concerned for any period between July 1, 2021 and December 31, 2021 without any subsequent repayment obligation.
For those who are not qualified for the program, they can instead request an extended payment agreement for their property tax.
How can owners prove their eligibility?
In addition to the standard requirements, landlords must provide proof that they have granted rent reductions in order to qualify for the program.
When requesting, owners must provide one of the following:
Copies of rental contracts proving the rent reduction
Large rental books
Letter from the property manager
Where applicable, residential property owners must also provide proof of their tenants' financial distress.
The documents can be a form of tenant statement explaining their current situation, copies of the written communication between landlord and tenant, and a letter from the property manager.
Landlords, however, must have permission from their tenants to share their information with the tax office.
Homeowners can request the program here.
Eligible homeowners can get a property tax reduction on their property tax payable for 2021. The value of the reduction will be the lesser of the amount of the rent reduction they gave their tenant or $ 100. % of the property tax attributable to the parcel of land leased to this tenant.
Relief will be given to the homeowner as a refund if they have already paid their property tax. It can also be used to offset the balance of the property tax amount payable.
How Can Landlords Profit from Residential Rental Payment?
Regulatory Improvement and Innovation Minister Kevin Anderson said homeowners can choose between asking for property tax relief or a payment of up to and including To $ 3,000 per rental if they agree to reduce their tenants' rent.
"This payment means homeowners will be less likely to face missing mortgage payments," Mr. Anderson said.
"Additional protections for residential tenants mean they won't have to worry about being evicted at this time due to circumstances beyond their control." "
Homeowners who have previously applied for the tax regime will not be eligible for lease payments.
Lease payments will be available to landlords who have reduced rent for affected tenants from July 14, 2021.
What must owners provide to be entitled to payment?
Landlords must submit the following to receive lease payments:
rental bond number or written rental agreement
a written agreement to reduce the rent
a duly completed tenants' consent to share their personal details
the account designated for payment
What information should landlords ask their tenants?
For the residential rent plan, landlords are required to obtain evidence of financial distress from tenants.
These may include documents such as payslips or bank statements showing reduced earnings, letter from employer stating termination or reduced hours, proof of closure certificate, medical certificates.
Landlords eligible for payments can claim up to $ 3,000 for each lease.
If they have already requested a payment of $ 1,500, which is the initial program cap, they will need to file a second claim of up to $ 1,500 and provide another variation agreement duly completed rental payment.
Landlords can request residential rental payment here.
