The Real Estate Institute of Victoria (REIV) has lashed out at the State Government, stating they have again ignored the plight of everyday mum and dad investors with the release of the renewed Commercial Tenancy Relief Scheme regulations.
Labelling the support program “one-sided”, the REIV said the regulations will likely see a significant number of small and medium sized property owners enter financial distress.
“Many of these Victorians are self-funded retirees who have endured a reduced capacity to support themselves over the past 18 months,” the REIV noted.
“Land tax concessions for property owners, while welcomed, offer little compensation when compared with the financial loss they must now incur through the waived rent of their commercial tenants.”
REIV President Leah Calnan said the lop-sided government support for tenants at the expense of the supply side has pushed a large number of property owners further and further into debt.
“When businesses are finally able to re-open, several owners will be forced into selling their investment properties into a difficult market, just to make ends meet,” Ms Calnan said.
“While tenants will not be required to repay waived rents, many others are unlikely to have the capacity to repay any of the deferred rents in the near term, if ever,” she said.
“It should also be remembered that suspension of mortgage repayments by banks is only a deferral on repayments, unlike the rent reductions, which means that the landlord still needs to pay with interest, notwithstanding the reduced income.”
Commercial tenants can access financial relief in the form of a proportionate reduction in rent.
For example, a business with a turnover of 40 per cent of pre-pandemic levels can only be charged 40 per cent of its rent.
Of the balance, at least half must be waived by the landlord, with the remainder to be deferred.
The government will provide land tax relief of only up to 25 per cent to the landlord.
Some landlords who can demonstrate acute hardship will be eligible to apply for payments up to a maximum of $3000 as part of a hardship fund.
