Property Owners with Qualifying Small and Medium Enterprise (SME) or Non-Profit Organisation (NPO) Tenants
Overview of the Rental Relief Framework
Interactions between the Property Tax Rebate and Rental Relief Framework
Owners of prescribed properties with tenants (including sub-tenants, licensees and sub-licensees) who meet the eligibility criteria are obliged to provide rental relief to their eligible tenants under the Rental Relief Framework. To support owners, Government is providing assistance in the form of (a) the Property Tax Rebate for Year 2020 announced in the Unity and Resilience Budgets; and (b) the Government cash grant announced in the Fortitude Budget.
Prescribed properties include retail, office and industrial properties. For more examples, please refer to the List of Common Examples of Prescribed Properties (PDF, 131KB)
Once the notice of cash grant is received by owners of prescribed properties with eligible tenants, such tenants will become automatically entitled to obtain rental relief from the owners. For qualifying commercial properties (e.g. shops), owners are obliged to provide rental relief for a period of up to 4 months from April to July 2020. For other non-residential properties (e.g. office / industrial properties), owners are obliged to provide rental relief for a period of up to 2 months from April to May 2020.
If the owner has already provided rental reductions or other monetary payments on or after 1 February 2020, these amounts can be offset against the rental relief that the owner is obliged to provide to the tenant under the Rental Relief Framework. For example, if the owner has passed on, or is obliged to pass on any Property Tax Rebate on or before 31 July 2020, these amounts can be taken into account and the owner only needs to provide rental waiver on the remaining sum due under the Rental Relief Framework.
Where a property owner has fully satisfied his obligation to provide rental waivers under the Rental Relief Framework, he would have also discharged his obligations with respect to passing on the Property Tax Rebate if the amount of rental waivers covers the amount of Property Tax Rebate required to be passed on. Otherwise, the property owner is still required to pass on the excess amount of Property Tax Rebate that is above the amount of rental waivers given.
Owner A rents a retail shop to Tenant A, at $5,500 per month. Owner A incurs $800 in maintenance fees and service charges per month. Tenant A qualifies for both the Rental Relief (supported by Government assistance) and the Additional Rental Relief (borne by Landlords). The Annual Value of the retail shop is $60,000, so Owner A received a Property Tax Rebate of $6,000. He already passed on $3,000 of the rebate to Tenant A in July 2020. Owner A also received a Cash Grant of $4,000 in August 2020
In this case,
- Owner A is required to waive monthly rent at $4,700 (i.e. $5,500 - $800). Tenant A still has to pay maintenance and service fees as they are not waived.
- Owner A is required to waive rent for 2 months (i.e. $4,700 x 2 for Rental Relief) + 2 months (i.e. $4,700 x 2 for Additional Rental Relief) = $18,800.
- Since he has already passed on the Property Tax Rebate of $3,000 to Tenant A in July 2020, he now needs to waive a further amount of $4,700 x 4 - $3,000 = $15,800.
- In respect of providing rental relief to his tenant, Owner A has received $10,000 in Government support consisting of Property Tax Rebate and Cash Grant
More details and examples to show how Property Tax Rebate can be treated as being passed on or offset via the rental waivers under the Rental Relief Framework can be found in the e-Tax Guide for Property Tax Rebate for Non-Residential Properties (Fifth Edition) (PDF, 945KB).
Property Owners with non-SME or non-qualifying NPO Tenants
Property Owner’s Obligation to Pass the Property Tax Rebate on to Tenants
Click here to download the infographic on Property Tax Rebate for Non-Residential Properties in 2020 (PDF, 342KB)
Click here to download the e-Tax Guide for Property Tax Rebate for Non-Residential Properties (Fifth Edition) (PDF, 945KB)
Click here for the (Temporary Measures) (Rental and Related Measures) Regulations 2020