The Victorian Government has passed legislation to support both landlords and tenants during COVID-19 as well as providing some clarity for those investors with property in Victoria. The $500 million package announced by the Government is in line with the National Cabinet decisions and recommendations and is designed to support both residential and commercial property owners.

This week we’re exploring the key elements of the new legislation as well as tackling some of the common questions that we’re seeing being asked in Victoria. Outlined below are the key elements of the new legislation:

Land Tax Relief

The Government has announced a $420 million package to support those landlords whose tenants have been impacted by COVID-19. If the landlord provides their tenants with some form of rent relief, then they will be eligible for up to a 25 per cent discount on their land tax, and the remaining land tax can be deferred until March of next year (2021). It’s important that you discuss this with your property manager if you are being asked to provide some form of rent relief, to ensure that however you structure it would not void your eligibility for the land tax relief.

Ban on Evictions

In line with the six month moratorium on evictions announced in Australia, Victoria has also announced a six month ban whereby a tenant hasn’t paid their rent due to COVID-19. You are still able to evict your tenant/s in some circumstances however, which include the following:

  • You’re looking to move into or sell the property
  • Your tenant breaks their tenancy agreement by subletting the property
  • Your tenant doesn’t pay their rent and haven’t been materially impacted by COVID-19
  • Your tenant doesn’t comply with the tenancy agreement for reasons unrelated to COVID-19

Ban on Rental Increases

Further to the ban on evictions other than the exceptions outlined above, both residential and commercial rents will be banned from being increased throughout the same six-month period. This will last until 29 September 2020. If you’re currently a tenant, and you’ve found that your rent has been increased in Victoria, or that your landlord is looking to increase your rent, then it’s important to seek legal guidance if this has happened after 29 March 2020.

Rental Assistance Fund Established

The Victorian Government has also established an $80 million rental assistance fund to help those tenants that are unable to pay their rent due to COVID-19. To be eligible for this rental assistance, the tenant will have to register their revised tenancy agreement with Consumer Affairs Victoria, have gone through a mediation process with their landlord and/or property manager, have less than $5,000 in the bank and still be paying 30% or more of their income in rent. Both Consumer Affairs Victoria and the Dispute Settlement Centre of Victoria are able to assist with the mediation process here.

Further to the above changes, the amendments that were going to be coming into effect this year for landlords in Victoria will now be pushed back until 2021. These changes were due to come into effect from 1 July, which would have allowed tenants to make minor modifications to the properties and banned evictions taking place that were not for a valid reason.

Overall, the announcements are positive in that they provide some clarity for both landlords and tenants with regard to their rights and obligations going forward. If you’re currently uncertain about your options, feel free to reach out to our team at Loansuite.



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