Commercial landlords at Dubbo must have negotiations about rent relief agreements with tenants in financial distress due to COVID-19 under a new $440 million initiative that also gives a tax break to support both parties.
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The NSW government is set to enact the National Cabinet Mandatory Code of Conduct as part of its land tax relief package geared at providing tenants with greater protection from evictions.
The measures will apply to commercial leases where the tenant is in financial distress due to COVID-19, including but not limited to shops, cafes, gyms, hairdressers, restaurants, offices, warehouses and industrial sites.
Under the code, landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19.
The Daily Liberal understands that if agreement is not reached, parties will be required to attend mediation through the Small Business Commission before pursuing any action in a court or tribunal.
Another key measure of the code is a freeze on rent increases.
The package's land tax relief is expected to be divided about 50-50 with about $220 million going to the commercial sector and a further $220 million expected to benefit the residential sector.
Eligible commercial landlords will be offered a land tax concession of up to 25 per cent of their 2020 liability if they pass the savings on to tenants through a rent reduction.
Dubbo MP Dugald Saunders said for any small business rent was one of the biggest fixed costs.
"...easing this burden will help operators survive and keep people employed, and that is what this new package is all about," he said.
"Small businesses in our part of the world have done it tough for so long with drought, and now COVID-19 is presenting new challenges.
"This package will not only give some assistance to small businesses but also the property owners who will hopefully be able to maintain their tenants."
A further land tax deferral for any outstanding amounts for a three-month period will also be offered to landlords.
Treasurer Dominic Perrottet said the initiatives would help businesses stay afloat and provide greater surety for tenants and landlords.
"This provides a way forward for tenants and landlords so they can reach an agreement during this difficult period and includes an incentive in the form of a land tax reduction," he said.
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