As of 14 April, 2020, the Office of State Revenue has started to process applications for land tax relief.

You may be eligible for one or more of the following land tax relief measures:

  • a land tax rebate reducing land tax liabilities by 25% for eligible properties for the 2019-20 assessment year
  • a waiver of the 2% land tax foreign surcharge for foreign entities for the 2019-20 assessment year
  • a 3-month deferral of land tax liabilities for the 2020-21 assessment year.
 
You will need to apply for the land tax rebate.

You do not need to apply for the foreign surcharge waiver or the 3-month deferral. Where the assessment amount has already been paid, the Office of State Revenue will reassess land tax to apply the waiver and provide a refund.

Eligibility

 
You may be eligible for the land tax rebate if at least one of the following circumstances applies to you.
  • You are a landowner who leases all or part of a property to one or more Tenants and all the following apply:
    • The ability of one or more Tenants to pay their normal rent is affected by the coronavirus (COVID-19) pandemic.
    • You will provide rent relief to the affected Tenant(s) of an amount at least proportionate with the land tax rebate.
    • You will comply with the leasing principles even if the relevant lease is not regulated.
  • You are a landowner and all the following apply:
    • All or part of your property is available for lease.
    • Your ability to secure Tenants has been affected by the COVID-19 pandemic.
    • You require relief to meet your financial obligations.
    • You will comply with the 'leasing principles' even if the relevant lease is not regulated.

What are the 'leasing principles'?

To be eligible for land tax relief, a landowner must commit to comply with the principles set out below. These principles will also be introduced into Queensland law in the coming weeks.

 
If you are a residential landowner, the principles are as follows:
  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
  2. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
  3. You will not end a tenancy for any reason other than on an approved ground; this does not include the tenant’s inability to pay rent or the end of a fixed term lease;
  4. You will not charge break lease fees for tenants who need to end a fixed term tenancy early due to the financial, health or personal safety impacts of COVID-19; and
  5. You will allow a tenant to refuse entry for non-essential reasons, including routine repairs and inspections, particularly if a member of the household has a higher risk profile if exposed to COVID-19.

If you are a commercial landowner, the principles are as follows:

  1. You will negotiate in good faith with your tenant to seek a mutually agreeable resolution if their ability to pay is impacted by COVID-19;
  2. You will not evict your tenant if they are in financial distress and unable to meet their commitments due to the impact of COVID-19;
  3. You will not increase rent, except where rent is linked to turnover;
  4. You will not penalise a tenant who stops trading or reduces opening hours;
  5. You will not charge any interest on unpaid or deferred rent; and
  6. You will not make a claim on a bank guarantee or security deposit for non-payment of rent.
 
If you are eligible for the land tax rebate under both the above circumstances, it is expected you will apply the rebate paid firstly to provide rent relief to your Tenants. You can then apply any remaining rebate to your own financial obligations (e.g. in relation to debt and other expenses). 

The land tax rebate will only apply to each property that meets the above eligibility requirements and conditions, rather than the rebate applying to entire taxable landholdings.

Where there are multiple Tenants for a single property, including mixed-use developments, if the eligibility requirements and conditions are met for at least one tenancy, then the whole property is eligible for the land tax rebate.

The land tax rebate does not need to be repaid if the eligibility requirements and conditions are met.

You can apply for the land tax rebate up to 30 June 2020 by logging onto your Office of State Revenue Online Account.

The content of this newsletter is to provide a general guide on this topic. Professional advice should be sought about your specific circumstances.

If you have any queries in relation to the above or require assistance with how the land tax relief may affect you as a Landlord or Tenant of a commercial premises, please contact our office and one of our experienced commercial lawyers will be able to assist.

Visit the Queensland Government website for further information.