The Victorian Government recently announced a range of tax relief measures in response to COVID-19 to assist landlords and businesses. The State Revenue Office (SRO) has now provided further guidance on these initiatives.
There are two separate relief measures:
- Land tax discount for eligible commercial and residential landlords, which includes the deferral of the balance of their assessed liability until up to 31 March 2021; and
- General land tax deferral for landowners with at least one taxable non-residential property and total taxable landholdings below $1 million, to be paid in full by 31 March 2021.
The SRO has also announced that a new Coronavirus Relief Deputy Commissioner will be appointed to manage the land tax relief claims.
Land tax discount for eligible landlords
The Government is providing $420 million in land tax relief to landlords who provide tenants impacted by the Coronavirus with rental reductions.
Landlords who provide rent relief to tenants due to the impact of the Coronavirus may be eligible to access a 25% reduction on the property’s 2020 land tax liability and defer the balance of their assessment until up to 31 March 2021.
The relief is also available to land owners who are unable to secure a tenant (residential or commercial) because of the Coronavirus.
Eligible property owners can apply for the land tax reduction through My Land Tax, an online SRO application, from 1 May 2020.
Eligibility criteria for tenanted properties
Land tax relief is available to landlords of residential properties and commercial properties (which includes retail, office and industrial) where the following eligibility criteria is satisfied:
| Residential properties | Commercial properties |
The owner of a tenanted residential property is eligible for land tax relief where the following is demonstrated:
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The owner of a tenanted commercial property is eligible for land tax relief where the following is demonstrated:
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Evidentiary requirements to support application for discount
The SRO has advised that the following information must be provided with applications for relief.
Information/evidence to be provided:
| Tenanted – residential or commercial | Untenanted – residential or commercial |
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Eligible property owners can apply for the land tax reduction from 1 May 2020. If the application is allowed, the SRO will automatically defer payment of any outstanding land tax from the owner’s 2020 assessment up to 31 March 2021.
General Land Tax Deferral
Land owners who own at least one taxable non-residential property and have total taxable landholdings below $1 million have the option of deferring their 2020 land tax payment. Where this relief applies, a land owner can defer their entire assessment, which may include residential land, to the final payment date of 31 March 2021.
An eligible land owner must own at least one taxable non-residential property. A ‘non-residential property’ includes commercial property, industrial property and vacant land (excluding vacant residential land, being property in inner and middle Melbourne that has been vacant for more than six months in the preceding calendar year).
Land owners who have already paid their 2020 land tax can request a return of the tax. The tax will then need to be paid in full by 31 March 2021.
We note that land owners of solely residential property will not be eligible for deferral, even if their total landholdings are below $1 million. Where a land owner owns non-residential property together with residential property, and total landholdings are under $1 million, the whole of the owner’s land tax liability is deferred, including the liability attributed to their residential property holdings.
The SRO has advised it will contact all taxpayers who are eligible for land tax deferral.
How can Rigby Cooke help?
If you are a property owner who has provided rental relief to at least one of your tenants, or who cannot secure a tenant due to COVID-19, we can work with you to determine whether you are eligible for land tax relief in respect of each of your properties.
Where a landlord has multiple tenants in the one property, if the eligibility requirements are met for at least one tenancy, then it appears that the whole property will be eligible for relief. However, the reduction of rent for the one tenancy must be at least an amount equivalent to the 25% proportional 2020 land tax for that property.
We can assist you in completing the application for relief, together with ensuring all supporting documentation is provided, and we can also lodge this application on your behalf.
In respect of the general land tax deferral, if you believe you may be eligible for deferral relief but have not been contacted by the SRO, we can apply for relief directly to the SRO on your behalf.
We make the final observation that the Commissioner of State Revenue has the discretion to grant relief from land tax in circumstances where paying land tax would cause serious hardship. If you consider this may be relevant to your circumstances, we can advise you and make an application to the SRO on your behalf.
* The above information is based on current guidance as advised by the State Revenue Office. While the Victorian Government may settle further conditions of eligibility for land tax relief, the SRO advises that land owners can apply for relief if they satisfy the above general criteria.
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