Tenants stand to benefit from 15% property tax rebates

Singapore

IN a bid to alleviate Covid-19's impact on businesses, landlords of private commercial properties are looking to pass on savings from the 15 per cent property tax rebate, which was part of the Budget package delivered on Tuesday, to their tenants.

The government will grant the property tax rebate to private commercial properties that qualify to support food services and retail establishments operating there, said Deputy Prime Minister and Finance Minister Heng Swee Keat in his Budget speech on Tuesday.

The tax rebate is part of the special S$4 billion Stabilisation and Support Package announced to ease the impact on sectors most affected by the virus outbreak. "I strongly urge landlords to pass this on to their tenants by reducing rentals," said Mr Heng.

Property giant CapitaLand was among the first landlords to make the commitment to do so.

"We will pass on the full savings of the rebate to retailers operating across CapitaLand malls," said Jason Leow, CapitaLand Group's Singapore and international president in a media statement.

The group is also rolling out additional relief measures to help its tenants "tide through this challenging period".

"As Covid-19 has impacted different malls and trade categories by varying degrees, the rental relief will be disbursed to retailers in a targeted manner, based on their individual needs and circumstances," said Mr Leow.

Other property groups have also responded in similar fashion. They told The Business Times that they have plans to ensure their tenants benefit from the tax rebates.

Said a Mapletree spokesman: "Mapletree is doing a detailed review, and will do what we can to support our tenants with this rebate."

Meanwhile, in response to BT's query, a Frasers Property spokesman said: "Frasers Property welcomes the support measures put in place by the government in today's announcement. We are studying the property tax rebate measure announced by the government today, and are evaluating how we pass the benefits on to our tenants."

The property tax rebate is also broadly welcomed by market watchers with most of them in favour of landlords passing on savings to tenants.

Teo Wee Hwee, head of real estate and asset management of KPMG Singapore, said: "In ensuring the effectiveness of these rebates, the government can consider enforcing reduced rents as a qualifying condition for the rebates, to ensure that landlords pass the savings to the tenants."

Tay Huey Ying, JLL's head of research and consultancy for Singapore, echoed similar sentiments urging landlords who have yet to provide support measures for their tenants to do so in the form of rental relief from the tax rebates to "help them stay afloat during this challenging time".

Ms Tay also pointed out that ahead of the property tax rebates announcement, landlords of some private sector malls had already extended assistance to their tenants amid the virus outbreak. Such support came in the form of rental rebates and shorter operating hours.

"The property tax rebates announced in today's budget for qualifying commercial properties will go some way in helping these landlords to cover revenue lost through the extension of rent rebates to their tenants," she said.

Desmond Sim, CBRE's head of research, South-east Asia, acknowledged that such tax rebates could take some pressure off corporates, but noted that off-budget measures could be implemented should the current rebates be deemed insufficient given the uncertain impact of the virus outbreak.

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