More commercial tenants to benefit from rent relief in Victoria
More commercial tenants struggling with rent payments will benefit from rent relief, with the Victorian Government having finalised new regulations and broadened eligibility for the Commercial Tenancy Relief Scheme (the Scheme).
The Scheme will help small and medium-sized businesses with an annual turnover of less than $50 million that have experienced a fall in turnover of more than 30 per cent during the pandemic.
Eligibility for rent relief has been broadened, with tenants now able to choose three consecutive months between 1 April and 30 September 2021 to compare to their turnover in the same three months in 2019.
Eligible business owners will get relief in the form of a proportionate reduction in rent. For example, a business with a turnover of 40 per cent of pre-pandemic levels can only be charged 40 per cent of its rent. Of the balance, at least half must be waived, with the remainder deferred.
Under the Scheme, the Victorian Small Business Commission (VSBC) will support tenants and landlords by providing information to assist with negotiating a rent relief agreement and access to free and impartial mediation if a fair agreement can’t be reached. The VSBC is also offering help with negotiations and free mediation in situations where the tenant isn’t eligible for the Scheme.
New businesses will also be protected under the Scheme, with any business that has opened since April 2019 eligible for assistance. New business owners can find out more by accessing our FAQs for the Scheme.
The Scheme will apply retrospectively from 28 July 2021 and will run until 15 January 2022.
The Victorian Government will provide land tax relief of up to 25 per cent to landlords waiving rent for their tenants, in addition to any previous 2021 land tax relief, at an estimated cost of $100 million. Businesses that own their premises may also be eligible. Eligible landlords will also be able to defer any remaining 2020 and 2021 land tax until 31 May 2022. More information will be made available on the State Revenue Office website.
Small landlords who experience hardship as a result of waiving rent between 28 July 2021 and 15 January 2022 under the Scheme will be eligible to apply for a grant of up to $6,000 per eligible tenancy as part of the Commercial Landlord Hardship Fund 3. In cases where landlords are experiencing acute hardship because of an agreed rent waiver, the grant may be increased to a maximum of $10,000 per eligible tenancy. FAQs and more information on eligibility and how to apply are available on the Business Victoria website.