Coronavirus Australia: NSW Government reveals $440m rent package

NSW tenants struggling as a result of the coronavirus pandemic will be better protected under a new $440 million rescue package.

The NSW Government has unveiled a multimillion-dollar package designed to save tenants from eviction and stop rent strikes during the COVID-19 crisis.

The State Government has earmarked $440 million for the plan, with half allocated to residential renters and landlords and half to commercial tenants impacted by the virus-induced shutdown.

Forced evictions will be barred for the next six months for residential tenants experiencing financial difficulties as a result of the coronavirus, with tenants who have lost at least a quarter of their income protected.

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The package means landlords or agents will have to negotiate with struggling tenants to find a solution.

There’s also help for NSW landlords, with the State Government set to waive land tax or offer a rebate of up to 25 per cent for those keeping on tenants who are facing financial pressures.

Commercial tenants with a turnover of less than $50 million will be eligible for relief if their revenue has fallen by at least 30 per cent due to the outbreak.

At a press conference this afternoon, NSW Treasurer Dominic Perrottet said the key focus was to have landlords and tenants negotiate together.

“In certain circumstances, particularly on a commercial basis … if there is a reduction in turnover of a certain amount, then there needs to be a proportionate reduction in rent from the landlord to cover that. On the basis of residential, we ask landlords to work through with their tenants over this period of time,” he said.

“Where tenants have not been affected by COVID-19, then their obligations to pay rent remain in place and we will work through these issues as they see fit.

“The reality is, as a result of this decision today, no tenant can be evicted over the next six months, simply because of being in a rental arrears.

“The other point I would make, for real estate agents that have marks against tenants names who fall behind in rental arrears, that those marks will not be put against that tenant’s name in circumstances where they have fallen into rental arrears over the next six months.”

Mr Perrottet said the land tax threshold in NSW was $732,000.

“For those who are liable for land tax, if they provide a reduction to their tenants, then we will provide a waiver or rebate of land tax in those circumstances,” he said.

“The other important point to make is that land tax obligations will also be deferred for the next three months in circumstances where we have a business that is affected by COVID-19 and that will provide an opportunity for landlords to work through these issues with the tenants over this period of time.”

Landlords of eligible tenants will be required to negotiate rent relief options under a new code of conduct revealed by Prime Minister Scott Morrison last week.

At the time, Mr Morrison said preserving commercial tenancies was an important part of the Government's wider economic strategy, and the code of conduct would be “legislated and regulated as appropriate” in each state or territory’s jurisdiction.

Under the code, “good faith leasing principles” will ensure landlords “must not terminate the lease” for a tenant or draw on securities, and on the flip side, tenants “must honour lease requirements”.

NSW Treasurer Dominic Perrottet said the package was designed for those directly affected by the coronavirus only. Picture: AAP Image/Joel Carrett

To achieve that, there could be “waivers of rent” or “deferrals of rent” over the course of the pandemic period, and rent must be reduced in proportion to the lost revenue of the business.

A binding mediation process will also be introduced, with landlords and tenants required to “sit down and work it out”.

The NSW Government will soon pass temporary legislation to enact the code.