The state government of Victoria extended support to residential tenants and landlords affected by the COVID-19 outbreak with a $500m relief package, as part of the $24.5bn additional emergency funding announced by the state.
The emergency funding aims to support efforts to fight the coronavirus, support jobs, and boost the Victoria’s recovery from the pandemic over the next two years.
Around $80m of the relief package will be set aside to help struggling tenants, while the remaining $420m will be spent on land tax reductions for commercial and residential landlords.
Landlords whose tenants are impacted by the COVID-19 outbreak will be eligible for a 25% discount on their land tax, while any remaining land tax can be deferred until March 2021.
Sarah Megginson, editor of Your Investment Property, told Channel 10 News that that package doesn’t go far enough to help landlords, who are being asked to give up thousands of dollars in rental income.
“Everyone is going to have the make some sacrifices, but I don’t think the landlord should have to bear the brunt of it all,” Megginson said.
In Victoria, land tax doesn’t apply to land worth less than $250,000, and Megginson points out this means that owners of apartments and units may not be required to pay any land tax.
As a result, this measure offers them little to relief.
Even if you do pay land tax, the 25% amounts to just a few hundred dollars in most cases. For instance on land worth $750,000 – keeping in mind this is just the land, not the entire property’s value – the land tax amount is $1750, so the discount being offered is worth just $375.
“If you’re being asked by the community at large to make these kinds of [long-term] rental reductions, a few hundred dollars in land tax relief isn’t going to offset much,” Megginson added.
How does it work for tenants?
Under the package, tenants could qualify for up to $2,000 in relief payments.
To be eligible, renters need to have registered their revised agreement with Consumer Affairs Victoria or gone through mediation, have less than $5,000 in savings and still be paying at least 30% of their income in rent.
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“More than ever, we need to be working in partnership, with landlords working with tenants and tenants working with landlords. The government is willing to help those most in need,” said Victoria Premier Daniel Andrews.
Aside from the package, the government also announced that evictions and rental increases will be banned for residential and commercial tenancies for six months.
The state government urged tenants and landlords to work together to "get through this crisis".
“Tenants and landlords who struggle to strike a deal over rent reductions will be given access to a fast-tracked dispute resolution service, with Consumer Affairs Victoria or the Victorian Small Business Commission mediating to ensure fair agreements are reached,” the government said in a statement.