Government cash grant (announced in Fortitude Budget)

The Government announced on 26 May 2020 as part of the Fortitude Budget, a Government cash grant to qualifying property owners that would provide relief for Small and Medium Enterprises (SMEs) operating in qualifying non-residential properties.

IRAS will issue a notice of cash grant and disburse the Government cash grant to qualifying property owners from end-July 2020 onwards. The notice of cash grant will trigger the rental waivers under the Rental Relief Framework, which aims to mitigate the impact of COVID-19 on SMES, by mandating the co-sharing of rental obligations between the Government, landlords and tenants. The Rental Relief Framework is also applicable for eligible Non-Profit Organisations (NPOs) and tenants of Government-owned properties.

For more information on the Rental Relief Framework for SMEs, you can refer to the Ministry of Law’s website.

Please note that the information provided on the Ministry of Law’s and IRAS’ websites are subject to the finalisation of the regulations.

Overview of the Government cash grant and rental waiver obligations

As announced in the Fortitude Budget, qualifying property owners will receive support via a Government cash grant and they must in turn provide support to eligible SME tenant-occupiers. This is in addition to the Property Tax Rebate for Year 2020 announced in the Unity and Resilience Budgets.

IRAS will issue a notice of cash grant and disburse the Government cash grant to qualifying property owners from end-July 2020 onwards. Once the notice is issued, the rent is treated as waived for eligible SME tenant-occupiers under the Rental Relief Framework as follows:

 Duration of Rental Relief1  
Type of ReliefQualifying Commercial Properties (e.g. Shops)Other Non-Residential Properties (e.g Industrial/ office properties)
(A) Rental Relief for SMEs (supported by Government assistance)2   
Rental waiver2 months (for April – May 2020)1 month (for April 2020)
(B) Additional Rental Relief
Rental waiver 2 months (for June – July 2020)1 month (for May 2020)
Total Rental Waiver3 4 months (for April – July 2020) 2 months (for April – May 2020) 

 
1 The rental waivers will apply only to the period of tenancy within the relief period.

2 Owners of qualifying commercial properties (e.g. shops) will generally receive approximately 1.2 months of rent through the Property Tax Rebate for Year 2020, and owners of other non-residential properties (e.g. industrial/ office properties) will generally receive approximately 0.36 month through the Property Tax Rebate for Year 2020. The Government will provide additional cash grants approximately equivalent to 0.8 month of rent to owners of qualifying commercial properties, and approximately 0.64 month of rent to owners of other non-residential properties (e.g. industrial/ office properties). To ensure that these measures benefit the intended beneficiaries, landlords will be required to grant eligible SMEs in qualifying commercial properties 2 months’ rental waiver, and eligible SMEs in other non-residential properties (e.g. industrial/ office properties) 1 month’s rental waiver.

3 Eligible tenants do not need to pay rent for the period covered by the Rental Relief Framework. If rent has already been paid, tenants can either apply the rental waivers to the next immediate month(s) of rent, or if this is not possible, get a refund from their landlords.


The Rental Relief will apply to all tenant-occupiers who are SMEs with ≤$100 million in annual revenue in the Financial Year ending 2018, based on Year of Assessment 2019 corporate or individual income tax returns, at the entity level.

The Additional Rental Relief will apply to those tenant-occupiers who:

  1. Have suffered ≥ 35% drop in average monthly revenue on an outlet level from April to May 2020, compared to April to May 2019; and
  2. Are SMEs at the group level (≤$100 million turnover  based on the latest available accounts).

The Rental Relief Framework applies to qualifying leases or licences which are:

  1.  (i) Entered into before 25 March 2020 or (ii) entered into before 25 March 2020 but expired and renewed either automatically or in exercise of a right of renewal in the contract; and
  2. In force any time between 1 April to 31 July 2020 for qualifying commercial leases or licenses; and 1 April to 31 May 2020 for other non-residential (e.g. industrial/ office) leases or licenses.
The value of the rent to be waived is based on the contractual rent of the tenant, excluding any maintenance fees and charges for the provision of services such as cleaning and security. 

The rental waivers may be offset by:

  1. Any monetary payments or reduction of rent or licence fee provided for, or previously agreed to, by the landlord to the tenant-occupier from February 2020 onwards; and/or
  2. Any Property Tax Rebate that has been passed on by the property owner in respect of the property.

For more information on the Rental Relief Framework, you can refer to the Ministry of Law’s website

What are the eligibility criteria for the cash grant?

The Government cash grant will be given to qualifying property owners of non-residential properties who meet the following criteria: 

  1. The property owner is an SME occupier who runs a trade or business on the property; and/or
  2. The property owner has eligible SME tenant-occupiers (including sub-tenants and licensees) who operate their business in the rented property with qualifying leases or licences which are:

    1. (i) entered into before 25 March 2020; or (ii) entered into before 25 March 2020 but expired and renewed automatically, or in exercise of a right of renewal in the contract; and

    2. In force any time between 1 April to 31 July 2020 for qualifying commercial leases or licenses; and 1 April to 31 May 2020 for other non-residential (e.g. industrial/ office) leases or licenses.

    For the purpose of the Government cash grant, SMEs are defined as enterprises with not more than $100 million in annual revenue in the Financial Year ending 2018, based on Year of Assessment 2019 corporate or individual income tax returns, at the entity level. Note: There are no requirements on the local shareholding or employment size. 

    How is the cash grant calculated?

    The amount of Government cash grant will be calculated based on the Annual Value (AV) of the property for Year 2020, determined by IRAS at 13 April 2020, as follows:  

    1. For qualifying commercial properties (e.g. shops):

      0.8 * (Annual Value / 12)
    2. For other non-residential properties (e.g. industrial/ office properties):

      0.64 * (Annual Value / 12)

      There will be no revisions to the Government cash grant amount, even if there are subsequent changes to the AV for Year 2020 after 13 April 2020.

      When will I receive the cash grant?

      From end-July 2020, IRAS will issue a notice of cash grant and disburse the Government cash grant to qualifying property owners. Property owners are then required to pass on a copy of the notice and provide rental waiver to its eligible tenants. The same applies to master tenants who are also required to pass on a copy of the notice and provide rental waiver to their eligible sub-tenants. 

      Generally, property owners, who are SME owner-occupiers or whose properties are wholly let out to SME tenant-occupiers with qualifying leases or licenses, will automatically receive the Government cash grant without the need to apply.  

      Property owners whose properties are only partially let out, or whose properties are let out to both SME and non-SME tenant-occupiers under a single property tax account, will not automatically receive the Government cash grant. In such instances, the property owner and tenants* should submit a joint application to IRAS and provide supporting documents such as the list of tenants (including master tenants, sub-tenants and licensees) within the property (with the relationship to the property owner i.e. indicating whether you are the master tenant, sub-tenant or licensee and monthly rent or license amount) and the corresponding lease or licence agreements. Please ensure that the lease agreements are duly stamped. 

      *For faster processing of your application for cash grant, tenants and landlords should submit one joint application for the property. Where the application comes only from tenants, IRAS will need to gather the required information from property owners.

      The application process will commence in August 2020 and the application form will be made available on IRAS website. More details on the application process will be released by end-July 2020.

      What happens after the notice of cash grant is issued to the property owner?

      Property owners are required to serve a copy of the notice to their tenants, or their master tenants. Master tenants who receive a copy of the notice are required to serve a copy of the notice to their sub-tenants.

      Rental waivers of up to 4 months (for qualifying commercial properties e.g. shops) or up to 2 months (for other non-residential properties e.g. offices or industrial properties) will be effective by operation of law once the notice of cash grant is issued by IRAS to qualifying property owners from end-July 2020. Eligible tenants do not need to do anything to obtain the rental waiver.

      For more information on the rental waiver under the Rental Relief Framework, you can refer to the Ministry of Law’s website.

      Recovery of cash grant

      IRAS may recover the cash grant from property owners (in full or in part) where the cash grant has been wrongly disbursed or disbursed in excess.

      For enquiries

      For enquiries on the Rental Relief Framework (including rental waivers): please contact the Ministry of Law via this form.

       

      For enquiries on the Government cash grant: please contact IRAS via this form.

       

      As agencies are currently experiencing a high volume of enquiries, we seek your understanding that the waiting time may be longer than usual.

      • 1. What is the Rental Relief Framework for SMEs?

        For more information on the Rental Relief Framework for SMEs, please refer to the Ministry of Law’s website.

         

      • 2. How do I check if I am entitled to rental waiver?

        The notice of cash grant will be issued by the IRAS to qualifying property owners from end July 2020. The property owner is then required to pass on a copy of the notice and provide rental waiver to its eligible tenants. The same applies to master tenants who are also required to pass on a copy of the notice and provide rental waiver to their eligible sub-tenants.

        Rental waivers of up to 4 months (for qualifying commercial properties e.g. shops) or up to 2 months (for other non-residential properties e.g. offices or industrial properties) will be effective by operation of law once the notice of cash grant is issued by IRAS to qualifying property owners. Eligible tenants do not need to do anything to obtain the rental waiver.

        In the event tenants did not receive the rental waiver even though they are eligible, tenants should clarify with their landlords on their eligibility and request a copy of the notice of cash grant from their landlords.

        Tenants may approach IRAS as a last resort to obtain a copy of the notice of cash grant if they are unable to obtain it from their landlords.

         

      • 3. Where the landlord is obliged to provide rental waiver of 1 or 2 months, as the case may be, will the rental amount of 1 month or 2 months to be waived be equivalent to the sum of property tax rebate and cash grant disbursed by the Government to the property owner?

        The Property Tax Rebate and Government cash grant provided to property owners are computed based on the Annual Value of the property. This may not be equivalent to the rental waiver to be provided by landlords, which is on the contractual rent of the tenant, excluding any maintenance fees and charges for the provision of services such as cleaning and security. Nevertheless, the landlord is obliged to provide the rental waiver based on the contractual rental as defined.

         

      • 4. How can I request IRAS to expedite the processing of the Government cash grant for my property?

        Owners of qualifying properties can expect to receive the notice for the Government cash grant from end-July 2020. Please allow about a month for the processing to run its course and in the meantime, IRAS will not be able to accede to any request to expedite the notice of cash grant.

         

      • 5. Can I appeal for the Government cash grant if IRAS has rejected my application?

        No. IRAS’ decision on whether or not to disburse a cash grant is final and no appeals will be accepted.

         

      • 6. Can a non-SME owner-occupier or a property-owner with only non-SME tenant-occupiers in qualifying non-residential properties apply for the Government cash grant?

        No. There is no exception to the eligibility criteria for the Government cash grant. Such property owners have been granted a rebate of up to 100% of the property tax payable for Year 2020 and there will be no further top up. Please visit IRAS website for more information on Property Tax Rebate for Non-Residential Properties in 2020.

      • 7. As a property owner, I have already passed on the Property Tax Rebate for Year 2020 to my SME tenant. Am I still required to provide rental waiver of 2 or 4 months, as the case may be, to my SME tenant?

        Yes, and the rental waivers can be offset by any Property Tax Rebate that has been passed on by the property owner in respect of the property.