Despite Prime Minister, Scott Morrison, declaring a six-month “eviction ban” for tenants struggling to make their rent repayments due to income loss caused by the Covid-19 pandemic, it’s up to each state and territory to make the measures law. Australian tenants who are in financial trouble are urged to negotiate a rent reduction with their landlords, but there’s no national Plan B if the landlord refuses.
Victoria’s relief package
Victorian Premier, Daniel Andrews, announced a $500 million package to assist commercial and residential landlords and tenants during the Covid-19 pandemic. The package includes $420 million in land tax relief for both residential and commercial landlords who provide tenants with rent discounts, and $80 million in relief payments for renters experiencing rental distress. A new Coronavirus Relief Deputy Commissioner will be established at the State Revenue Office to manage package claims.
The state government is also setting up a fast-tracked dispute resolution process for tenants and landlords. This will be mediated by Consumer Affairs Victoria or the Victorian Small Business Commission.
No evictions or rent rises for tenants
There’s now a temporary ban on evictions of tenants and a ban on rent increases for the next six months. The $80 million rental assistance fund will be reserved for renters facing hardship due to the Coronavirus crisis. These payments will be capped at $2,000 and eligible renters will need to have registered their revised agreement with Consumer Affairs Victoria or gone through mediation, have less than $5,000 in savings, and still be paying at least 30 percent of their income in rent. The government is also introducing the agreed upon national cabinet’s temporary ban on evictions and pausing rental increases for six months to ease financial hardship.
Landlords given tax relief
Landlords will be offered a 25 per cent discount on their land tax when they pass on rent reductions to their tenants who are impacted by the Coronavirus crisis. Any remaining land tax can be deferred until March 2021. It is expected that more than 10,000 landlords will access the land tax relief.
A special sitting of Parliament will be held next Thursday to pass legislation for the measures and to introduce temporary bans on evictions and rental increases. Landlords and tenants are still encouraged to work together to reach an agreement.