A new law that obliges commercial property owners to unconditionally pass on their property tax rebate in full to their tenants does not make these property owners worse-off, Deputy Prime Minister Heng Swee Keat said yesterday.
In fact, it staves off rental terminations and keeps their premises rented out, he added, in response to comments from some property owners that such an obligation penalises them.
Landlords who fail to pass on the savings to their tenants “without reasonable excuse” face fines of up to $5,000 under the Covid-19 (Temporary Measures) Bill, which was introduced and passed yesterday.
“With a property tax rebate of up to 100 per cent, property owners pay less or even no property tax for the year.
“Property owners should pass the full tax savings on to their tenants, as the property tax rebate is intended to benefit the tenants,” said Mr Heng, who is also Finance Minister, in his round-up speech of the supplementary budget debate.
Commercial properties that qualified for Budget 2020’s rebates of 15 per cent to 30 per cent will, with enhancements introduced in the Resilience Budget, pay zero property tax for this year. A property tax rebate of 30 per cent for this year has also been granted in the supplementary budget to all other non-residential properties, such as offices and industrial properties.
“On the cost front, I am heartened to see some property owners passing on the 100 per cent rebate fully to their tenants, by reducing rentals,” said Mr Heng.
He added that some property owners, such as Mapletree Commercial Trust, have even gone further, by giving their tenants more than the property tax rebate that they receive, to share the burden during this time of uncertainty.
“Despite these commendable moves, I have received feedback from tenants that some property owners have yet to pass on the property tax rebate to them.
“This is why we are imposing a legal obligation on property owners to unconditionally pass on to their tenants the full amount of rebate that is attributable to the tenanted properties,” said Mr Heng.
“With this move, I trust that all property owners will do your part, support your tenants, and give additional help to tenants who need it.”
Landlords who fail to pass on the savings to their tenants “without reasonable excuse” face fines of up to $5,000 under the Covid-19 (Temporary Measures) Bill, which was introduced and passed yesterday, if they are found guilty.
The Government is leading by example, he said, by giving a rental waiver of up to three months for government-owned properties, which helps about 36,000 tenants.
Ms Foo Mee Har (West Coast GRC) noted that “it is regrettable that we have to enact new laws to compel landlords to pass on property tax rebates to tenants”.
Although some tenants are unable to secure even $100 revenue a day, “a sum too little to cover rental for a day”, Mr Christopher de Souza (Holland-Bukit Timah GRC) said some landlords have “not been prompt to pass on the rebate saving to their tenants, adopting a wait and see approach”.
“We should make it compulsory for the commercial landlord to pass on the full property tax rebate, in actual dollar terms, to the tenants,” he added. “Such prescriptive legislation ensures the money spent from our Budget is indeed stretched.”
Have a question on the coronavirus outbreak? E-mail us at [email protected]
To get alerts and updates, follow us on Telegram.
Source: Read Full Article