NSW gives 25% per cent land tax relief to landlords.

NSW gives 25% per cent land tax relief to landlords.

Earlier this month the NSW Government announced additional land tax assistance with both commercial and residential landlords able to receive land tax concessions of up to 25% of their 2020 calendar year land tax liability. This $440 million relief package follows the previous package announces that sets out rental waivers and deferrals for commercial tenancies, for more.

Support package.

A reduction of up to 25 per cent of the land tax payable on a parcel of land in the 2020 land tax year is available when;

  • your land is used for business or residential purposes
  • you’re leasing property on that parcel to a residential tenant – or a business tenant with annual turnover of up to $50 million – who can demonstrate financial distress resulting from the COVID-19 outbreak
  • you reduce the rent of the affected tenant by at least as much as the tax reduction
  • the land tax is directly related to the property for which rent has been reduced.

Financial distress is:

  • for commercial tenants – a 30 per cent drop in revenue due to COVID-19 pandemic
  • for residential tenants – a 25 per cent drop in household income due to COVID-19.

Who’s eligible.

To be eligible for the land tax support package, you must have a land tax liability in 2020.

You must also meet the requirements outlined in the support package, namely:

  • your tenant is suffering from financial distress as a result of COVID-19
  • you have reduced the rent of the affected tenant by at least as much as the tax reduction.

If you’re a landlord who doesn’t have a 2020 land tax liability, refer to the Service NSW website, which provides a number of NSW Government support options you may be eligible for.

If you require more information please click here or get in touch with our team on 02 9415 1511 or email reception@primeadvisory.com.au.

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IMPORTANT: JobKeeper updates including extensions, eligibility and more.

IMPORTANT: JobKeeper updates including extensions, eligibility and more.

After a week of frantic registrations for the JobKeeper payment, the Tax Commissioner and Treasurer have begun to make some amendments to the scheme. Please see below the key changes that may impact you.

Registration deadline extended.

On Friday 24th April the Tax Commissioner extended the registration deadline for April and May JobKeeper payments to 31 May 2020. However, to be eligible for April JobKeeper payments employers will still need to ensure that staff have been paid at least $1,500 for the first two JobKeeper fortnights (30 March – 12 April and 13 April – 26 April) by the end of April.

Eligibility changes for 16 & 17 year olds.

Full time students who are 17 years or younger and not financially independent have been excluded from receiving JobKeeper payments. This change will apply prospectively so employers who have already paid employees will not be out of pocket. Clients should take this change into account before making further payments to these employees. For more updates made to JobKeeper please click here.

Dedicated hotlines for employers to call to bridge finances.

The government have noted that many employers are experiencing cashflow difficulties whilst waiting for JobKeeper payments to arrive for their employees. Treasurer Josh Frydenberg has arranged dedicated hotlines with the major banks so employers are able to call in relation to accessing financial support to bridge the timing of wages payments to JobKeeper reimbursements. We note that it would be best to approach a bank that you already have an account with, but all bank hotline numbers are below:

  • Westpac – 1300 731 073
  • NAB – 1800 562 533 (1800 JobKeeper)
  • CBA – 13 26 07
  • ANZ –  1800 571 123

As always, we are here to help so please get in touch 02 9415 1511 or email reception@primeadvisory.com.au.

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Federal Government coronavirus economic stimulus stage 3

Federal Government coronavirus economic stimulus stage 3

On 8th April 2020, the Australian Government’s JobKeeper payment passed parliament with an estimated $130 billion to be paid to hundreds of thousands of business to subsidise wages of about 6 million employees.

The JobKeeper Payment

The JobKeeper Payment is a temporary scheme open to businesses that have been impacted by Coronavirus and have seen significant reductions of between 30% – 50% in annual turnover.

The government will provide $1,500 per fortnight per eligible employee for up to 6 months.

The package aims to support employers to maintain connection to their employees while the business is experiencing a downturn so when the crisis is over, businesses can reactivate their operations again quickly.

The Jobkeeper Payment will also be available to self-employed.

Who can apply?

Employers (including non-for-profits) will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month), or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month); and
  • charities that have lost 15 per cent of their turnover in the same period.
  • self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered or expect to suffer a 30 per cent decline in turnover relative to a comparable prior period (of at least a month).

How to apply

Businesses need to apply to the ATO to participate in the scheme and provide supporting information demonstrating a downturn in their business. They also need to report the number of eligible employees employed by the business on a monthly basis

The ATO encourages employers looking to take advantage of the JobKeeper payment to register for updates at www.ato.gov.au/JobKeeper and the ATO will contact those registered as soon as more information is available.

For more information from the Government please click here.

Who is an eligible employee?

Employees on the books on 1 March 2020 and continues to be engaged by the business.

Includes full-time, part-time, long-term casuals (been with the business on a regular basis for at least 12 months as at 1 March 2020) and stood down employees.

An employee must be an Australian citizen, the holder of a Permanent Visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.

How can we help?

We are here to help, please feel free to give us a call 02 9415 1511 or email reception@primeadvisory.com.au, and we can discuss in further detail.

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SMSF information regarding tenancies in your property & COVID-19

SMSF information regarding tenancies in your property & COVID-19

The economic impacts of the COVID-19 crisis are causing significant financial distress for many businesses and individuals.

If your SMSF has a property and a tenant in financial distress, you may be able to provide your tenant with rental relief under an agreed commercial arrangement. This may even be the case when the tenant is a related party or yourself.

Ordinarily, charging a tenant a price that is less than market value in an SMSF is usually a breach of superannuation laws. However, the ATO have provided guidance which allows SMSF landlords to provide for a reduction in or waiver of rent because of the financial impacts of the COVID-19.

For the 2019–20 and 2020–21 financial years, the ATO will not take action where an SMSF gives a tenant – who may also be a related party – a temporary rent reduction during this period.

What do you need to do?

There are some important things you should ensure are in place when you are providing a rent reduction to a tenant, especially when this is a related party.

  • Ensure the relief only applies to rent.
    • Any relief offered to a tenant can only relate to the rent component of the lease agreement. The ATO concession does not extend to other lease incentives.
  • Ensure that the reduction in rent is only temporary.
    • This means it should have an agreed period of time or agreed date where the rent is reviewed in light of the economic circumstances.
  • The financial difficulty faced by the tenant is linked to the financial impacts of COVID-19.
    • Any negotiated rent relief will need to be measured against the COVID-19 financial impact suffered by your tenant.
  • Clear arrangements which detail the amount of discount, waiver or deferral of the rent.
    • In evidencing that the rent relief is reasonable, it would be best practice if it is consistent with an approach taken by an arm’s length landlord.
  • Ensure you have proper documentation which allows your independent auditor to be satisfied that the temporary rent relief satisfies all of the above.
    • This may take the form of a signed minute, renewed lease agreement or anything deemed appropriate to amend the terms of the lease temporarily.
    • Even if you are both the tenant and landlord, the above should all be documented.

These are extraordinary times and the ATO is providing this guidance to allow SMSF trustees to be flexible and agile.

If trustees act in good faith in implementing a reasonable and measured reduction in rent because of the impacts of COVID-19 they should not fall foul of the law.

How can we help?

If you need assistance providing rental relief or whether this is the right action for you and your specific circumstances, please feel free to give us a call 02 9415 1511, and we can discuss in further detail.

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New working from home tax rate.

New working from home tax rate.

On 7th April 2020, the Australian Taxation Office (ATO) announced special arrangements this year, due to COVID-19, to make it easier for people to claim deductions for working from home. The new arrangement will allow people to claim an increased rate of 80 cents per hour for all their running expenses incurred during the period 1 March 2020 to 30 September 2020, including;

  • Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work.
  • Cleaning costs for a dedicated work area.
  • Phone and internet expenses.
  • Computer consumables (e.g., printer paper and ink) and stationery.
  • Depreciation of home office furniture and furnishings (e.g., an office desk and a chair).
  • Depreciation of home office equipment (e.g., a computer and a printer).

Multiple people living in the same house can claim this new rate. For example, a couple living together could each individually claim the 80 cents per hour rate. The requirement to have a dedicated work from home area has also been removed and now you will only be required to keep a record of the number of hours worked from home. The new rate does not prohibit people from making a working from home claim under existing arrangements, where you calculate all or part of your running expenses. Claims for working from home expenses prior to 1 March 2020 cannot be calculated using the new rate, and must use the pre-existing working from home approach and requirements, more from the ATO.

As always, please don’t hesitate to contact the team 02 9415 1511 or email us reception@primeadvisory.com.au to see how this may apply to you.

For a more detailed explanation on what you can (and can’t) claim on tax if you’re working from home click here.

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