Parliament

New rules ensure 'no undue burden' on landlords

Velocity@Novena Square with shops still shut in June, during phase one of Singapore's reopening. The new provisions ensure that the rent waivers which landlords grant to tenants under the rental relief framework are also considered part of their obli
Velocity@Novena Square with shops still shut in June, during phase one of Singapore’s reopening. The new provisions ensure that the rent waivers which landlords grant to tenants under the rental relief framework are also considered part of their obligations.
ST FILE PHOTO: WANG HUI FEN
Velocity@Novena Square with shops still shut in June, during phase one of Singapore's reopening. The new provisions ensure that the rent waivers which landlords grant to tenants under the rental relief framework are also considered part of their obli
Mr Lawrence Wong explained how the new regulations will benefit landlords, and said details will be provided through subsidiary legislation and on the Inland Revenue Authority of Singapore’s website when ready. PHOTO: GOV.SG

New regulations will make certain there is "no undue burden" on commercial landlords when they pass on obligatory property tax rebates to tenants, Second Minister for Finance Lawrence Wong said in Parliament yesterday.

The provisions passed under the Covid-19 (Temporary Measures) Act yesterday ensure that the rent waivers which landlords grant to tenants under the rental relief framework are also considered part of their obligations.

Illustrating how the amendments will benefit landlords, Mr Wong cited an example of a change in tenants halfway through the year, with one terminating the occupancy in July and another taking up the space from August.

If the first tenant is a small and medium-sized enterprise (SME), the property owner would have to waive up to four months of rent from April to July under the rental relief framework.

The owner should have then also fully satisfied his obligation to pass on the benefit of the property tax rebate of about 1.2 months of rent, as well as some of the cash grant, Mr Wong noted.

But under the existing property tax rebate regulations, the landlord would also be required to pass on the benefit of the property tax rebate to the second tenant, pro-rated to about 0.5 month, he pointed out.

"This is not the intended outcome. This is because the owner had already waived four months of rent for Tenant A under the rental relief framework and passed on the benefit of the property tax rebate to Tenant A. So, the owner should not need to pass on any benefit of the property tax rebate to Tenant B.

"That is why the Bill provides regulations to be made retrospectively, to ensure that this position is maintained," Mr Wong said.

The Bill also allows regulations to be made to allow the owner to recover the excess amount from the second tenant if he has already passed on the benefit of the property tax rebate, he added.

Details of the regulations will be provided through subsidiary legislation and on the Inland Revenue Authority of Singapore's website when ready, Mr Wong said.

The property tax rebate was announced as part of Budget measures in February and enhanced in March. It grants owners of non-residential property between 30 per cent and 100 per cent of the rebate on property tax payable from Jan 1 to Dec 31 this year.

Under the rental relief framework which came into force on July 31, cash grants are also given to qualifying property owners, who are required to provide rental relief to eligible SME and non-profit organisation tenants for the period from April to at most July, depending on the type of property.

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A version of this article appeared in the print edition of The Straits Times on November 04, 2020, with the headline New rules ensure 'no undue burden' on landlords. Subscribe