Last updated: 26 June 2020
In April 2020, the Western Australian Government established the Land Tax Assistance for Landlords program to help commercial landlords and their small business tenants who have been financially affected by the COVID-19 pandemic.
The program provides landlords, who provide rent relief to their small business tenants, with partial compensation through a grant that is linked to their land tax obligations. Assistance will be provided through a capped grant program of $100 million. Grants will be awarded on a first come, first served basis to encourage landlords to quickly negotiate rent reductions with eligible tenants.
Landlords whose applications are successful (terms and conditions apply) will receive payments equivalent to 25 per cent of their land tax bill for 2019-20 (including the Metropolitan Region Improvement Tax (MRIT) component) that relates to eligible tenants.
So that we can best assist you and to avoid delays with your application please read all this information before applying for a grant.
To be eligible to receive the grant payment, landlords must meet the following criteria:
- Each property included in the application must be valued at $300,000 or more (at unimproved value) or be subject to land tax.
- Each tenant must be a small business that has experienced at least a 30 per cent drop in turnover due to the impact of COVID-19 (one way to confirm this is using the ATO’s test for JobKeeper Payment) and they must confirm this in writing to you.
- The tenant’s rent must have been fully waived for three months or equivalent (ie. 50 per cent over six months) starting from a date between 1 March 2020 and 31 August 2020.
- Landlords will not seek to recover the waived rent (in whole or in part) during or at the end of the three month period and will not increase any outgoing charges for a period of six months.
- There must be a valid tenancy agreement between the landlord and tenant in place.
Applying for the grant
Once landlords have registered for an account they will be asked to provide details of their business (including a copy of their Land Tax Notice of Assessment for 2019-20) and details of their eligible tenants.
Following an approvals process, payment to successful applicants is expected to be made within six weeks of the date of their application.
FAQs for landlords
How do l know if l qualify for the Land Tax Assistance for Landlords program?
If you can answer yes to all of the following questions you can apply for the grant.
- Is your property subject to land tax?
- Is one or more of your tenants considered a small business (as defined by the Small Business Development Corporation Act 1983)?
- Has your small business tenant(s) suffered at least a 30 per cent drop in turnover due to the impact of COVID-19 (as defined by the ATO’s test for eligibility for the JobKeeper payment) and can they confirm this to you in writing?
- Have you (or will you) fully waived your tenant’s rent for three months (or equivalent) starting from a date between 1 March and 31 August 2020? Note – a condition of applying for this grant is that you will not seek to recover the waived rent (in whole or in part) from your tenant(s) at the end of the three month period.
- Have you agreed (or will you) to not increase any outgoing charges for a period of six months or more, starting from the same date as you agreed to waive their rent?
I have already provided full rent relief to my tenant, does this qualify?
Yes, if you meet the eligibility criteria, and the relief period started from a date between 1 March and 31 August 2020.
No, there must be a valid tenancy agreement in place. For the purposes of this program a ‘valid tenancy’ is one which:
- is documented and between two entities that are capable of creating a valid lease arrangement (this means that an arrangement between a landlord and a tenant who are the same person or entity, and who are acting in the same capacity, does not constitute a valid lease);
- was in place on or before 1 May 2020 (if a new lease has been entered into after this date it will be accepted providing it is a renewal of an expired lease, and there has been no change to the landlord or tenant entities since 1 May 2020); and
- is not an artificial tenancy (this means one where the landlord and tenant have entered into the tenancy, or artificially structured or arranged the tenancy or their business, for the sole or dominant purpose of becoming eligible for a grant when the landlord would not otherwise be entitled).
Do I qualify if l provide rent relief to my tenant but over a longer period?
Yes, you are eligible if you provide a minimum level of rent relief equivalent to a waiver for three months. This could mean providing a 50 per cent reduction in rent over a six month period.
Can I claim for a tenancy if I am also the landlord?
No, you can only apply for tenancies in cases where you or your business (or any other business that you may control or own) are not the tenant. The landlord and tenant must be different entities and/or people.
If I am a local council tenant and deemed to be the owner of the property for land tax purposes can I still apply for the grant?
You can only apply if you are subletting part or all of the property to another tenant(s) and meet the eligibility criteria.
What steps should I take before applying?
- Find your Land Tax Notice of Assessment for 2019-20.
- Start negotiating with tenants in ‘good faith’ (ie. with a sincere intention to deal fairly with them). Confirming that they:
- Draft an agreement with each tenant recording confirmation that you will waive their rent for a period of three months (or equivalent), and that you will not increase outgoing charges for six months or more. (Six months is the minimum for the grant program, however you may decide to negotiate a longer term.)
- Ensure the agreement has a clause that you will not seek to recover the rent waiver (in whole or in part) from the tenant at the end of the three month period, nor increase outgoing charges for the six month period.
Will I need to provide my ABN as part of the application process?
Yes you will. Your ABN is used during the assessment process to check the validity of the details provided. You need to be aware that the progress of your application will be affected if the ABN you give does not match your details on the ABN Lookup or ASIC Connect or your Land Tax Notice of Assessment. Please visit these sites and check all your details are correct before making your application.
Can I still apply for the grant without an ABN?
Yes, during the online application process, enter your ACN with two zeros in front of it, so it’s an 11 digit number. If you or the tenant don’t have an ABN or an ACN just enter 99999999999 (eleven nines) in the required field.
I don’t have a Land Tax Notice of Assessment because I purchased the property during the 2019-20 assessment year. Do I still qualify?
Yes, however you will have to provide proof of purchase and meet the other criteria.
I haven’t paid my land tax bill for the 2019-20 year, am l still eligible?
Yes, providing you meet the eligibility criteria.
Do l have to provide a copy of my new agreement with the tenant (with details of waiving rent and not increasing outgoings charges) when applying for the grant?
No, only a copy of your Land Tax Notice of Assessment is required. However you need to be aware that your application may be reassessed or the grant offer withdrawn if it is found that your application and supporting documents are incomplete or inaccurate.
Could a property with an unimproved value of less than $300k be recorded on a Land Tax Notice of Assessment?
If you own a property with an unimproved value of $300k or less, you are not subject to land tax and therefore ineligible for the grant. If you own multiple properties, each with an unimproved value of $300k or less, for land tax purposes you are assessed on the aggregated value of all your properties. You are therefore liable to pay land tax and so are eligible for the grant. In short, if you pay land tax you are eligible, if you don’t pay land tax you are ineligible.
What do I do if I have multiple small business tenants in the same property and am only providing full rent relief to those who have demonstrated a downturn in turnover of 30 per cent or more?
The grant assistance is provided on a proportional basis. For example: You have a property with a total area of 200m2 with four tenancies, but rent relief is being provided to only two. Tenancy number one is 50m2 and tenancy number two is 100m2 (a total of150m2). Therefore land tax assistance can be claimed on 75 per cent of that property.
If a property has two or more land identities and is valued as a group on the Land Tax Assessment how do l determine which amounts apply when applying for the grant?
When multiple lots of land are grouped for valuation purposes, they should be treated as one property for the purpose of the application. The Land Tax Notice of Assessment details the overall taxable land held by the landlord, its taxable value, its assessable value and the proportionate amount of tax payable. If the Land Tax Notice of Assessment lists several land ID numbers for one building, use the first one.
I have several properties, can I apply for all of them at once?
For most landlords, all your eligible tenancies should be included in one application. If you are a landlord with a number of properties with many tenancies, we strongly recommend you submit one application per property; one per shopping centre, for example. You can lodge multiple applications but must not include any tenancies you have previously applied for.
If you have reached agreement on the equivalent of three months’ rent relief and not increased outgoing charges to your eligible tenants, you don’t need to wait until you have agreed with all the tenant in one property before submitting an application. You can submit an additional application at a later date (subject to funding availability).
My tenant is really struggling, can I provide rent relief for more than three months?
We would encourage you to continue to negotiate with your tenant, however no further grant assistance beyond three months (or its equivalent) is available under the Land Tax Assistance for Landlords program.
As well as land tax l also pay a Metropolitan Region Improvement Tax (MRIT) component – do I get relief for a percentage of this tax?
Yes, the grant will be calculated on the same percentage as the land tax component.
How long will the program last?
The program goes for six months starting on 1 May 2020 or until the funds run out. We recommend that you make your application early as the program will operate on a first come, first served basis.
How and when will l receive the grant payment?
Once your application has been processed and approved you will receive a direct payment to your nominated bank account. Payment is expected to be made to successful applicants six weeks from the date the application was submitted.
Can I request a review if my application is rejected?
Yes, if you are not happy with the decision you apply to the SBDC for a review. Following the review the SBDC may make a recommendation to the Director General of the Department of Local Government, Sport and Cultural Industries, but is not be obliged to do so. The subsequent decision of the Director General will be final and binding.
FAQ for tenants
Can I force my landlord to apply for the Land Tax Assistance for Landlords program?
No, the decision as to whether to apply is for the landlord to make.
Summary of commercial tenancy support for the COVID-19 pandemic
To understand what the new commercial tenancy support packages could mean for you, download our Commercial tenancy support: COVID-19 pandemic fact sheet. This is an easy to understand summary of each program, what it means for tenants and landlords, key application dates and useful links to more information.