The Prime Minister has announced new rules for commercial tenancies.
Tenants and landlords can waive or defer their rental amount if they are eligible for the 'Jobkeeper' program and have a turnover of $50 million or less annually.
For rent waivers, up to 50% of the rental amount can be waived, with the reduction proportionate to a business's fall in turnover.
For the deferral of rent, the full amount can be deferred, provided that money is repaid in the lease term.
If there is six months or less on the lease term, the parties have the pandemic period plus an extra 12 months to repay the amount.
Buying an investment home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for investors.
Base criteria of: a $400,000 loan amount, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the product provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 01 June 2020. View disclaimer.
Mr Morrison reinstated that tenants and landlords must work in good faith and sit down to come to a common solution.
“Landlords must not terminate the lease ... tenants must honour the lease,” Mr Morrison said.
“Landlords will be required to reduce rent proportionate to the decline in turnover.”
He also reiterated that banks would be required to help pitch in, after he and the premiers struck a deal with industry players to protect the parties involved.
An independent body will be set to mandate the new rules, with the states and territories still to announce a full new mandate on residential tenancy agreements.
On Monday, Queensland was the first state to offer any form of rental assistance for residential tenancies; a one-off payment of up to $2,000, paid directly to landlords.
To be eligible, tenants must have lost their job due to the pandemic and applied to Centrelink for income support, among other requirements.
The announcement comes after the Government announced a six-month moratorium on rental evictions last week.
The Prime Minister then said the co-operation between banks, tenants and landlords is vital to the Government's plan for the economy.
"This is part of the hibernation approach where we want people bespoke, customised to their own circumstances to sit down and work these things out," he said.
"There is no rulebook for this. We are in uncharted territory, but the goal should be shared."
Two-thirds of businesses cashflow impacted by COVID-19
New data released on Tuesday revealed 66% of Australian businesses reported their turnover or cash flow had reduced as a result of COVID-19.
The research, released as part of the Australian Bureau of Statistics (ABS) research on the impact of the coronavirus, found 47% of businesses had made changes to their workforce arrangements since the pandemic began.
This included temporarily reducing or increasing staff working hours, changing where staff worked, or staff being placed on leave.
38% of businesses had changed how they deliver their products or services, including shifting to online services.
Over a third of businesses had renegotiated their lease and rental arrangements and a quarter had deferred loan repayments.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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