After the Federal Government imposed a six-month moratorium on evictions, the state governments have been working on individual measure to assist renters and landlords throughout the COVID-19 crisis.
There are a number of questions that need answering, both for landlords and tenants and so far, the changes have been a work in progress.
Over the last week, a number of states have managed to finalise some new legislation for renters and this is what the different states are currently doing.
NSW
The NSW Government is focusing on land tax as opposed to a direct payment, to assist struggling renters.
If a renter has lost 25% of their income, landlords are eligible for a 25% cut to their land tax. Assuming the landlord agrees to pass this on to the tenant in the form of a rent reduction.
Keep in mind, land tax is only payable in NSW for properties valued above $734,000.
There is also a six-month moratorium on evictions of tenants who fall into arrears because of impacts from the coronavirus.
President of the REINSW Leanne Pilkington labelled the move to transfer the burden to landlords as ‘unjust’ but acknowledged there were cases where renters would need assistance.
“Rent relief will be necessary (for some tenants), should they lose their jobs or have their work scaled back”.
“But it doesn’t look like a particularly fair deal for landlords at this stage.”
REINSW CEO Tim McKibbin believes that there has been ‘little concern for landlords’ in recent weeks.
“The overwhelming majority of landlords are ‘mum and dad’ investors who own just one property, not Westfield and Stockland.
“The NSW government has made it very clear that landlords are expected and required to ‘waive’ all, or a significant portion, of the rent due by the tenant”.
VIC
The Victorian government has put in place a plan to give rent relief payments of up to $2,000 for tenants experiencing hardship because of coronavirus.
The program will be funded by an $80 million rental assistance fund and will be open to tenants earning less than $100,000 a year who have less than $5,000 in savings. Tenants must also be paying more than 30% of their income in rent.
Tenants and landlords will be left to negotiate the terms of the rent between themselves.
Steve Mickenbecker, Group Executive, Financial Services & Chief Commentator at Canstar believes the changes are putting landlords in a tricky spot at the moment.
“Landlords do look to be disproportionality impacted by this. Yes, they can get a repayment holiday, but they are also in a position where people can and will take advantage of a rent holiday. A rent holiday isn’t something that is clawed back like a mortgage holiday. So I think there is a disproportionality large burden put on landlords.”
QLD
Initially, QLD looked like it was going to have some of the strongest laws to support renters in the country. These measures have since been scaled back in line with the other states after lobbying from the real estate industry.
Land tax relief will be offered to landlords as well as a ‘last-resort’ $2,000 payment to struggling renters.
These come on the back of the six-month freeze on evictions that’s been backdated to 29 March.
Lisa Perruzza, Business Development & Leasing Team Manager from Place Estate Agents Bulimba, thinks the current changes are a win-win for both tenant and landlords.
“It’s a win for both the landlord and tenant as we now have a pragmatic commercial and mutually supportive set of parameters. Specifically for tenants, it gives surety about their tenures
as they cannot be evicted if COVID19 impacted. Equally, it gives owners security of income with respect of what needs to be demonstrated for tenants to qualify for hardship status.”
Lisa Perruzza feels that leaving in the notice to leave without grounds for landlords who have equally found themselves in difficult circumstance due to COVID19, would have been beneficial to investors.
WA
In line with the rest of the country, the West Australian Government has made a six-month moratorium on COVID-related evictions.
During the ‘emergency period”, it’s also illegal to increase rents and any fixed-term tenancies due to expire will continue on as is. Tenants are now also allowed to break a lease without incurring any fees.
Tenants who have been impacted by losing their job can apply for up to $2,000 – which will be part of a $30 million residential rent relief fund. This payment will go directly to the landlord, but the tenant must have lost their job and applied for Centrelink to be eligible.
President of the REIWA, Damian Collins says the last round of changes do help equalise the issues landlords were facing.
“We understand the need to protect tenants, but in doing that the problems and burden go back onto the landlord. The latest changes do go some way to helping. And we didn’t ever expect landlords to be fully compensated for this.”
Kirsty Pilcher, Senior Property Manager at aussieproperty.com believes the changes to WA are a good compromise for both tenants and landlords and feels it’s important to ‘look at each case individually’.
However, she thinks that there could be some better processes put in place for resolving disputes.
“A quicker conciliation process would have been helpful for tenants and landlords that cannot come to a solution together.”
SA
The South Australian Government as yet hasn’t rolled out a direct financial relief package but has imposed the same kind of eviction laws as the rest of the country.
The government is cutting land tax and will allow deferment of 2019-20 land tax bills by six months.
For the time being, routine inspections can be done by video to avoid close contact and maintain social indicating measures.
Andrew Shields, Interim General Manager of REISA, feels that at this point in time, landlords are the ones that are losing out.
“From what we can tell, landlords are really not seeing any financial benefits from the changes so far. Less than a cup of coffee per week. So, landlords do seem to be impacted the most.”
TAS
In Tasmania, landlords will not be able to increase rent prior to 30 June along with the non-eviction period.
Tenants and landlords are being told to negotiate with one another, however, both parties can break the lease if it is likely to lead to hardship. Landlords will also be able to access land tax relief.
ACT
In the ACT, if landlords cut their tenants rent by at least 25 per cent for up to six months, they can access land tax cuts themselves.
The government will match 50 per cent of the rent reduction up to $2,600 over a period of six months – which equates to $100 per week.
Like other states, there is also a freeze on rent increases, the moratorium on evictions and renters won’t be blacklisted if they run into financial hardship and fall behind.
NT
The Northern Territory Labor government has opted against a moratorium on evictions when they sat on April 24.
The Government intends to make changes to negotiating and notice periods instead of the moratorium on evictions which was agreed to by the National Cabinet and implemented across the other states and the ACT.
Source: Australian Property Investor Magazine 30/4/20
