Landlords must pass on rebates to tenants in timely manner

Property owners will have to pass on the property tax rebates received to their tenants in the form of monetary payment or reduction in rentals in a timely manner and without conditions, National Development Minister Lawrence Wong said in Parliament yesterday, introducing new legislation meant to ensure support measures reach the intended recipients.

He noted that some property owners are already passing on the rebate to tenants - in some cases reducing rents by larger than the quantum of the rebate - but he said the Government has received feedback from tenants of property owners that have yet to do so.

To help businesses affected by the Covid-19 pandemic, owners of non-residential properties are granted the property tax rebate of 30 per cent, 60 per cent or 100 per cent depending on the nature of the property.

A 100 per cent property tax rebate will work out to slightly more than one month of rent for most properties, Mr Wong said.

A section of the Covid-19 (Temporary Measures) Bill, which was passed yesterday, requires the property owner to pass on the full amount of property tax rebate attributable to a rented property to his tenant in a timely manner, either by making a cash payment or by offsetting future payments.

Property owners are also prohibited from imposing conditions when passing on the rebate. The property owner must keep records that he has so passed on the benefits and when he has done so.

Failure to properly pass on the rebate or to keep a proper record is also an offence, Mr Wong stressed.

For instance, if a property tax account is for a property wholly rented out to a tenant for the whole of this year, the property owner should pass on the full sum of the rebate he received as the rebate is entirely attributed to a rented space, he said.

In total, the 2020 property tax rebate would cover about 135,000 property tax accounts, including 33,000 property tax accounts for about 360 retail malls.

Property owners pay property tax for each property tax account. In many cases, one property will be covered under one property tax account. But there are also many other cases where there is one property but multiple property tax accounts, Mr Wong said.

Property owners are also prohibited from imposing conditions when passing on the rebate. The property owner must keep records that he has so passed on the benefits and when he has done so.

For example, a retail mall would have multiple property tax accounts because a shop within the mall, like a retail store or a restaurant, would be accounted for by its own property tax account.

The Bill also provides the property owner or tenant with an avenue of redress should there be any dispute over whether the owner has properly passed on the benefit, or whether the provisions apply to the owner.

Should a dispute arise, the property owner or his tenant may apply to a valuation review panel, which will adjudicate disputes. Any disputes relating to the transfer of the property tax rebate granted this year must be brought to the panel by Dec 31 next year.

"The panel will determine if the property owner has indeed passed on the rebate fully to his tenants in the required manner, and by the required timeline. The panel may make further directions for compliance by the owner," Mr Wong said.

"The Government urges all property owners to support their tenants through this difficult time, and with this Bill, we will require all property owners to do their part."

Source: Straits Times, 8 April 2020