Victoria offers further relief to car park owners and landlords with vacant property

Victorian Treasurer Tim Pallas has announced yesterday further assistance for Victorian landlords who are struggling with Victoria’s COVID-19 lockdown.

Car park owners will be granted 25% relief on their 2020 Congestion Levy premiums if they have been hit materially by the dramatic drop off of vehicle traffic into Melbourne’s CBD and inner suburbs. Owners will also be able to defer payment of levies until 2021.

Residential landlords that would have been subject to Vacant Property Land Tax in 2020 will also have those amounts waived.

The change regarding land tax is a logical step to support the property industry, given both the current economic uncertainty and the difficulty in penalising a landlord who has been unable to precure a new tenant during restrictions. It is also a reasonable assumption that commercial car parks have had their businesses severely impacted by the restriction of movement to 5kms from home during stage 4 restrictions.

The most significant relief will come from the reduction in Congestion Levy, given the loss of revenue through Congestion Levy is likely to be close to $30m. Additionally, vacant property tax lost is estimated to be around $6 million.

Does the reduction go far enough? Congestion Levy on car parks is designed to deter people from driving into the dense postcodes of Melbourne, which has already been the case since COVID-19 restrictions were first introduced in March and is likely to remain until at least 27 November as per the Government’s Roadmap. It could be argued that a concession of up to 75% would be more reflective of the conditions operators have endured during 2020.

Overall, it’s good to see the Victorian Government looking to implement practical steps to continue to balance the needs of supporting the property industry impacted by COVID-19 whilst maintaining its critical revenue stream of property owners.

For more information please contact your William Buck advisor

Victoria offers further relief to car park owners and landlords with vacant property

Neil Brennan

Neil is the national leader of William Buck's Business Advisory division and Property and Construction group. Neil services a broad base of property focused clients by providing advice around business structuring, strategic business and planning advice and cash flow strategies to enable his clients to maximise the return on their investments while navigating the complex regulatory environment associated with property transactions.

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