New details of rent relief scheme for Victorian businesses revealed

Rent relief will kick in for struggling Victorian businesses who have lost trade during lockdown — here’s how it’ll work.

Rent relief will kick in for struggling Victorian businesses who have lost more than 30 per cent of their trade, with new details revealed on how the scheme will work.

The Andrews Government will on Tuesday introduce new laws requiring rent relief for commercial tenants who have been hit from reduced turnover from the pandemic.

Information about the Commercial Tenancy Relief Scheme (CTRS) was limited when first announced but the state government has now finalised further details over how it will operate.

Rent relief will be negotiated with landlords and calculated by comparing turnover from the final quarter of the 2020/21 financial year with turnover from the same period in 2018/19.

Tenants will be eligible if the amount lost is greater than 30 per cent and the size of the discount will be based on how much revenue has been missed.

For example, a business who has lost 50 per cent of their turnover could negotiate to have half their rent reduced.

Out of the money discounted, half must be waived while the remaining amount can be deferred.

Business are slowly clawing back business after another lockdown. Picture: NCA NewsWire/ Luis Ascui

To prevent fraud there will be a mandatory reassessment of turnover as the scheme is rolled out.

Extra arrangements will also be made to ensure new businesses that were not open in 2019 can also access the program.

For businesses that already have a rent reduction agreement in place from the first scheme, deferred rent repayments requirements will be frozen until January 15, 2022.

They can then negotiate a new agreement and any outstanding money added to the amount of rent deferred under the new CTRS.

Protections are backdated to July 28, when the program was first announced, and commercial tenants cannot be evicted without a direction from the Victorian Small Business Commission (VSBC).

Density limits and stay at home direction will still affect turnover of businesses for months to come. Picture: NCA NewsWire/ Luis Ascui

Pub owners have previously warned they need to operate at full capacity to wade through the financial situation. Picture: NCA NewsWire/ Luis Ascui

Tenants and landlords are encouraged to negotiate an arrangement between themselves, with mediation and support from the VSBC available if an agreement cannot be made.

Landlords who provide discounts will have access to land tax relief of up to 25 per cent while those struggling financially can also access a $20 million hardship fund.

“It’s encouraging to see the way tenants and landlords are working together to achieve fair outcomes and this new legislation will ensure they get the support they need,” Small Business Minister Jaala Pulford said.

“We know many small businesses have had a tough time due to the pandemic, but these changes will provide them with more security going forward and help them get back on their feet.”