Tax relief for landlords, a six-month ban on both evictions and rental increases are part of Victoria’s $500 million package aimed at landlords, residential and commercial tenants. The new package is made up of $420 million in land tax relief for commercial and residential landlords, and an $80 million rental assistance fund for tenants facing hardship due to Covid-19. Victoria follows New South Wales and Queensland in the latest rent and land tax relief measures in response to Covid-19.
Evictions will be banned for residential and commercial tenancies, of small and medium-sized businesses, for six months. Rental increases will also be banned for commercial and residential properties for the six month period.
In his announcement, Premier Daniel Andrews said partnerships would have to be formed between tenants, landlords and banks: “More than ever, we need to be working in partnership. Landlords working with tenants. Tenants working with landlords.”
The package will be backdated to when the national cabinet announced the six-month moratorium on evictions, on 29 March.
A fast-tracked dispute resolution service will also be established, with Consumer Affairs Victoria or the Victorian Small Business Commission mediating, for tenants and landlords unable to come to an agreement.
While land tax reduction isn’t going to be applicable for all investors, Real Estate Institute of Victoria (REIV) President Leah Calnan said it would certainly assist a reasonable number of people.
“We’re pleased that the government has provided clearer formulas for rent reductions, and working on that 30 per cent indicated will make it much easier for tenants to be able to demonstrate where they have had a reduced income during Covid-19,” Calnan said. “Both parties, renters and owners are experiencing hardship… I think these formulas will allow negotiations to be clearer and a little bit more transparent.”
Victoria’s parliament will be recalled for an emergency sitting next Thursday to pass the new rental relief package.
Victoria will provide $420 million in land tax relief. If a landlord provides tenants impacted by coronavirus with rent relief, they will be eligible for a 25% discount on land tax, while any remaining land tax can be deferred until March 2021.
A new Coronavirus Relief Deputy Commissioner will be established at the State Revenue Office to manage land tax relief claims.
The state said it will “urgently legislate” so that eligible small and medium-sized businesses can achieve rental waivers or deferrals, in line with the national cabinet agreement to implement a mandatory code of conduct for commercial tenancies. Measures for eligible businesses include an annual turnover under $50 million and have suffered more than a 30% reduction in turnover due to coronavirus.
Evictions will also be banned for six months for the non-payment of rent for commercial tenancies for small and medium-sized businesses.
Evictions will be banned for residential tenancies for six months. Rental increases are also banned for commercial and residential properties for the same period, to allow tenants some relief once the eviction ban is lifted.
State government will offer an $80 million rental assistance fund for vulnerable tenants.
Eligible tenants will have to prove they have less than $5,000 in savings, still be paying at least 30% of income on rent, and show a deal with the landlord has been made — via mediation or registering a revised agreement with Consumer Affairs Victoria.