Owners of more than 58,000 qualifying retail and food and beverage properties, including shophouses, will not need to pay property tax for this year, but some tenants say landlords are dragging their feet on passing on the savings.
The Government expanded the property tax rebates announced earlier to allow about 60,000 commercial properties that qualified for Budget 2020’s rebate of 15 per cent or 30 per cent to now pay zero property tax for this year.
These include 2,000 properties in education, recreation, healthcare and services and 450 hotels and serviced apartments, according to the Ministry of Finance.
Owners of qualifying properties can expect to receive their refunds by June 30.
The rebate works out to more than a month of rent relief for most tenants, a boost from just a few days in the earlier round.
Even so, some industry groups say the savings are small compared with the 50 per cent to 70 per cent revenue losses suffered by many retail tenants and F&B companies as travel restrictions and global lockdowns decimated the tourism industry and social distancing measures were tightened to contain the coronavirus pandemic.
Tenants have called on landlords to do more, such as providing more months of rent relief or allowing them to pre-terminate their leases without risk of losing their security deposits, to help them survive the downturn.
SG Tenants United for Fairness, a group of more than 400 retailers, said that “only a few mall owners have chipped in with rental rebates above what the Government has offered. Many have not even committed that they will pass on the 100 per cent property tax rebate promptly and unconditionally”.
“Most of our community are small SMEs which are unable to get proper legal counsel when mall operators choose to delay or minimise rental help by threatening legal action. We look forward to hearing more details from the Minister of Law, regarding help for business owners who may face bullying, unreasonable behaviour or legal penalties from landlords,” it said.
Some major landlords including City Developments and Mapletree Commercial Trust have said they intend to pass on the property tax rebates to tenants.
SPH Reit, which owns Paragon, said last week that it will fully pass on its rebate “in a targeted manner” to tenants adversely affected by the pandemic. It will also extend its tenants’ assistance scheme to this month and next month, granting rebates according to tenants’ needs. Effectively, the most affected tenants will have base rents waived for up to two months.
CapitaLand said it would be giving rental rebates of 1.5 months for eligible tenants in addition to the half-month rebate it announced for most of its tenants in February.
Frasers Property Group, which has a combined retail portfolio of 14 malls in Singapore, will give $45 million in additional rental rebates.
“Tenants will receive full property tax rebates from the Resilience Package and cash security deposits will be released to offset one month’s worth of rent. (Those) who are most impacted will have their rental payments fully offset for April and May,” a spokesman for Frasers Property Retail said.
Not all landlords are equally proactive, however.
A tenant at Wheelock Place, who declined to be named for fear of a backlash from his landlord, said he had not received any rent relief despite sales dropping up to 70 per cent. Wheelock Properties (Singapore) did not respond yesterday.
“If Wheelock doesn’t give us anything, I have to shut down my store within the next month or so. Before the outbreak, we were easily clearing $100,000 in sales. Now, I can’t even hit $30,000 a month. And my rents are about $35,000 a month,” the tenant said.
“My stocks come from Brazil, but my supplier there has shut down his factory for one month because of the coronavirus. I can absorb disruption for one month, but if the shutdown is extended, it will be a problem for me,” he added.
Rajah & Tann senior partner Norman Ho said it is “difficult to say that the landlords are slow in passing on rebates unless we expect them to dig into their pockets to pay without certainty of receipt of (the rebates). The tenant cannot use this opportunity to withhold contractual payment of rent”.
Mr Kurt Wee, president of the Association of Small and Medium Enterprises, disagreed.
“Everybody has to share the pain. We feel that landlords should match the Government dollar for dollar on rent relief and give tenants a further 1.2 to 1.5 months, which means the tenants get a total of 2.5 to three months of rent relief.
“This will mean the landlords will give up about 12.5 per cent of their annual rent income. But this pales in comparison to the retailers that have lost 60 per cent to 80 per cent of their revenue,” he said.
Source: Read Full Article