Investors, landlords and tenants are experiencing great challenges and changes to both their living and financial situations due to COVID-19. The team at Clarke & Humel, your local Northern Beaches Real Estate Agents are actively monitoring the situation and are doing all we can to support the rental community.
COVID-19 has significantly affected the rental market, impacting both landlords and renters alike. We have seen an impact on real estate on the Northern Beaches including our hometown of Manly.
Economic fallout and rising unemployment inevitably have a flow-on effect throughout the community.
From tenants not being able to pay their rent due to loss of employment to landlords who are then unable to pay their mortgages or face the unenviable position of deferring loan payments that are added to the future balance and other expenses that go with owning and managing a property.
We have sifted through the influx of information so that landlords and renters can easily access the new regulations and help available.
Find out the latest rental news and regulations in NSW below:
Open homes and inspections
Restrictions on open home inspections for both sales and rental properties and including routine inspections for leased properties have now been lifted.
With current social distancing guidelines to adhere to, open homes will be monitored by keeping detailed records of attendees and managing the number of people entering small spaces.
To promote good hygiene please use hand sanitiser prior to entering any property and to avoid touching any handles or surfaces inside – we will do this for you!
$440m land tax relief package
The NSW government is offering a $440m land tax relief package that applies equally to both commercial and residential tenancies in response to the COVID-19 crisis. The package has been developed to equally support both landlords and tenants.
25% of the package is allocated as land rebate or waiver to support landlords and allow them to provide rental relief to tenants.
6-month moratorium on evictions
The national cabinet indicated that residential tenancies are a matter for the states and territories.
From April 15th, a six-month eviction moratorium has been agreed nationally, however, a nationally consistent approach to financial support has not been established and each state has its own unique approach.
If a tenant has not been able to pay rent and is genuinely experiencing hardship due to COVID-19, both landlord and tenant can negotiate on a rental reduction or waiver. It is always better for both tenants and landlords to be proactive.
To qualify for the 60-day or 6-month eviction moratorium renters must:
- Have lost or experienced a significant employment reduction due to COVID-19.
- One or more renters have had to cease employment due to being affected by the illness or are required to care for a member of the household exposed to the virus.
- Experienced a reduction in household income by 25%. The 25% is calculated on income after tax and is assessed on total household income, including the new job keeper payments.
- Rent that accrues during this time period is required to be paid back.
- Landlords can access a land tax waiver to help them with reductions in rental income. Landlords are eligible for a tax waiver or rebate of up to 25% when they accommodate to tenants experiencing financial hardships.
- Tenants must have experienced a 25% loss of income due to COVID-19 for landlords to claim land tax support.
- 60-day stop on landlords seeking to evict tenants who cannot pay their rent. A 6-month rental moratorium applies to tenants who have experienced significant financial disadvantage due to COVID-19.
- All landlords are required to be accommodating towards renters experiencing financial hardship.
- Landlords are advised to negotiate a rental reduction with the tenants in good faith.
- If landlords themselves are experiencing significant financial duress or hardship, they can apply to the tribunal to take back possession of the property after the 60-day stop.
- The government land tax package allows landlords that are experiencing financial hardship to defer land tax for the next three months.
Fair trading is able to assist in the negotiation between renters and landlords and has provided templates for renters and landlords to help facilitate negotiations.
These unprecedented and challenging times require us all to work together and having the right information helps.
Clarke & Humel are doing everything we can to stay up to date with the impact of COVID-19 on the property and rental market.
Please contact us if you have any questions or queries relating to the new government regulations and what this may mean for you and we will do our best to support you with your query.