Coronavirus: rent relief ‘nothing more than a mirage’

A tax relief package for landlords has been so inaccessible that barely a few hundred beneficiaries have been approved.

NSW Finance Minister Damien Tudehope said the government had received over 3,800 applications for rent relief, 628 of which had been approved as of Thursday. Picture: Jonathan Ng

A much-vaunted tax relief package for homeowners and landlords has been so inaccessible to applicants that barely a few hundred beneficiaries have been approved by the NSW government, two months after it was promoted as a leading financial lifeline during the COVID-19 pandemic.

The $440m land tax relief package was announced by the Coalition in mid-April as the state’s answer to struggling landlords and their tenants, who were scrambling to negotiate payment plans at the height of the economic uncertainty.

Instead of providing a hardship fund for tenants, per the policies of other states, the NSW government moved to provide a 25 per cent reduction on land tax to homeowners and other landlords if they agreed to pass on the savings to renters.

In NSW, landlords pay land tax if they own a property or series of properties valued above $734,000, although this does not include their residential address.

Property owners whose investments fall below that amount do not pay land tax and are not eligible for the tax relief.

The state opposition criticised the package because these were the landlords most likely to require assistance, rather than those with multiple properties.

It was expected the $440m package would be split down the middle between the residential and commercial property sectors, but two months after its ­announcement the numbers have skewed heavily in favour of commercial applications.

Finance Minister Damien Tude­hope told The Australian the government had received more than 3800 applications relating to 1705 residential properties and 3358 commercial properties, a division of about 34 per cent and 66 per cent respectively.

As of June 18, he said, 628 applications had been approved, amounting to $3.2m in relief, less than 1 per cent of the original budget. “We are always reviewing our support measures and looking at new ways to ensure our support is targeted at where it is needed most,” Mr Tudehope said. “If we need to do more, we will.”

Applications are assessed by Revenue NSW based on “evidence provided in support of the application”, Mr Tudehope told NSW parliament last week.

The assessments require documentation that proves the ­reduction in rent has been agreed to by both landlord and tenant.

Applications close in October.

Labor finance spokesman Daniel Mookhey criticised the data, saying it suggested a policy failure and “nothing more than a mirage” that did little to help either landlords or tenants.

“Every tenant struggling to pay their rent, and every landlord struggling to pay their loans, should feel outraged,” he said.

“Basically, none of the money promised has been paid to them. The Treasurer’s failure to pay $439m of the $440m promised is a wasted opportunity to help tens of thousands of landlords and ­tenants when they desperately need assistance.”

Labor has been critical of the scheme since it was announced. It pointed to Australian Taxation Office data suggesting about 16 per cent of landlords would be eligible for the tax waiver. They said the waiver would tend to assist wealthy landlords with multiple properties, or high-value properties, rather than small-scale investors whose properties fell below $734,000 in value.

Labor’s alternative policy position was to establish a hardship fund for tenants that would provide a one-off direct payment of up to $2500 to help with monthly costs. The package was costed at roughly $140m.