COVID-19: What Residential Property Investors need to know

COVID-19 and the subsequent economic shut down has led to a substantial drop in the take home earnings of large segments of the Australian population. This is putting extreme pressure on the everyday Australians.

The state government is asking property owner to work together with their tenants so all get to the other side of this pandemic.

Special COVID-19 Protection Package for vulnerable tenants

The state governments have put in place legislation to protect vulnerable tenants that have been adversely effected by the pandemic.

The QLD government has implemented the following policies:

Freeze on Evictions

Property Owners will be prohibited from evicting a tenant due to lack of payment or if the lease expires.

Lease extension

Property owners must offer at least a 6 month extension if the current lease expires with 6 months of 29 March 2020. This is not a new agreement.

Allow Early Exit

Tenants will be able to end their lease early if their health is adversely affected or if they are unable to pay due the pandemic. Any break lease cost will be capped at one weeks rent.

No Extraordinary Measures

Property owners cannot request tenants sell personal assets or access superannuation early to meet payments. Property owners cannot ask them for copies of the bank statements.

Conciliation

Where both cannot reach an agreement, there will be compulsory conciliation for COVID-19 related disputes through the Residential Tenancies Authority.

No entry

Tenants can refuse entry to the property for non-essential reason, including routine inspections. Owners or managers can enter for essential repairs, regulatory obligations (smoke alarms) or for emergencies. If the tenant refuses entry they must allow virtual inspection

State Relief Package for Property Owners

The QLD government has announced a $400m package to support property owners impacted by the pandemic.

Land Tax

Property owners will be eligible for up to three waiver and three month deferral of land tax provided:

• The ability of the owner’s tenants to pay their normal rent has been effected by the pandemic
• The owner has provided rental relief to the tenant (minimum amount commensurate with land tax relief)
• The owner complies with the Leasing Principles:
  • Negotiate in good faith to seek mutual resolution
  • Not evict tenant due to financial distress
  • Not end a tenancy due to unpaid rent or end of term
  • No break lease fee
  • All tenant to refuse entry for non-essential reasons

Rental Grant

Is available for those who do not have access to other financial assistance (JobKeeper / JobSeeker) or are awaiting application to be approved and have exhausted all other options.

A one off payment of up to 4 weeks rent, up to a maximum of $2,000 is able to be paid to the landlord.

For more information please visit the QLD Govt. website Apply for a Rental Grant 

How can Walsh Accountants Help?

If you’re a residential landlord and you would like to discuss this issue, please do not hesitate to contact our office to speak with your Accountant,  or a specialists from our Property and Construction Team