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Iras giving 0.5 month rent relief cash payout to 50,000-plus property tax accounts

Iras giving 0.5 month rent relief cash payout to 50,000-plus property tax accounts

Source: Straits Times
Article Date: 04 Jun 2021
Author: Grace Leong

The scheme aims to help retailers and SMEs tide over the latest Covid-19 restrictions.

Eligible tenants under some 50,000 property tax accounts of qualifying commercial properties are expected to receive a half-month rental relief cash payout directly as part of the new rental support scheme announced last week.

The scheme aims to help retailers and small and medium-sized enterprises (SMEs) tide over the latest Covid-19 restrictions.

The Inland Revenue Authority of Singapore (Iras) told The Straits Times on Thursday (June 3) that it "expects the number of qualifying tenants and owner-occupiers to be similar to last year, where we disbursed the cash grant to about 50,000 property tax accounts for qualifying commercial properties".

One property tax account may contain more than one property.

Many retailers that have suffered a massive drop in sales amid the restrictions in place from May 16 to June 13 have cheered the Government's announcement of rental relief and increased wage support.

But some say more landlords could do more.

Rental relief will be offered to SMEs and non-profit organisations with an annual revenue of not more than $100 million that are tenants of qualifying commercial properties. It is part of an $800 million support package announced by Finance Minister Lawrence Wong last week.

The payout, which will be disbursed from mid-August, is computed based on the latest contractual gross rent from May 14 to May 29. Iras said this would include gross turnover rent, maintenance fees and charges that tenants pay for the provision of services, such as cleaning and security.

Some industry players say this method of computation is fairer as it takes into account maintenance fees and other fees that tenants pay as part of gross rent. They also welcomed the fact that most qualifying tenants will receive the cash payout automatically without having to apply.

But they noted that the 0.5-month payout is still less than four months of base rent waivers given last year. And this year, landlords are not mandated to match the government payout.

As a result, many have not done so despite the Government's urging, they added.

Mr Logan Wong, founder of Pure Senses and a member of the Fair Tenancy Industry Committee, said: "When the previous rent reliefs were announced last year, many tenants initially thought these were based on gross rents, not base rents. That was one source of unhappiness between the landlords and tenants, because tenants felt they were getting less relief."

Under the enhanced Covid-19 (Temporary Measures) (Amendment) Act last year, eligible tenants and sub-tenants in the food and beverage and commercial sectors enjoyed four months of waiver of base rent from April to July 2020 - two months each from the Government and the landlord.

This was as long as their leases were in force on April 1, 2020. Base rent excludes any gross turnover payable, maintenance fees and charges for services such as cleaning and security.

Even though some landlords have offered help before last week's announcement, at least one retailer at Jurong Point said her landlord is still reviewing whether to give them rent relief.

Ms Shermaine Wee, founder of gifts and stationery shop Klosh, said she has seen a 50 per cent drop in sales since the heightened restrictions last month, and had been in talks to extend her lease at Jurong Point until Dec 31 this year. Her current lease ends on June 30.

"We didn't commit to another long-term lease because of the uncertain situation. But the landlord rejected our request for a temporary extension," she said. She said she was told by the landlord that they are "will need time to review tenants' sales before we can reach out to those who will be adversely affected during this period".

"We have been at Jurong Point since 2009. This is not the way to treat a long-time tenant. There should be some goodwill also," Ms Wee said.

Meanwhile, City Developments has granted a 50 per cent waiver of net rent for the majority of its tenants and a 100 per cent gross rental waiver for those under mandated closure and who cannot operate online from May 16 to 13 June.

"Close to 90 per cent of our retail tenants will be granted such waivers, in addition to rent restructuring for some whose businesses are still badly affected in the first half this year and rental payment flexibility for those facing cash flow issues," CDL said.

Ms Valerie Wong, general manager of asset management at GuocoLand, said "the extended tenant support will be calibrated in a measured approach to meet the business needs of each tenant".

CapitaLand said it has provided its retailers whose operations are impacted by the measures with rental rebates, rental restructuring and operational support to continue sales through its online platforms eCapitaMall and Capita3Eats.

"For those who are mandated to close, such as tenants of Westgate and Jewel Changi Airport or providers of personal care services where masks are not worn, we have offered them rental waivers during the closure period," it said.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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