SMEs to get more rent relief; new Bill in the works to make landlords give rental waiver

SINGAPORE – Small and medium-sized enterprise (SME) tenants will get more rent relief through a cash grant to offset their rental costs as part of the Government’s efforts to help them get back on their feet after the circuit breaker period.

A new Bill will also be introduced next week that mandates that landlords contribute by granting a rental waiver to their SME tenants who have suffered a significant revenue drop in the past few months, Deputy Prime Minister Heng Swee Keat said in Parliament on Tuesday (May 26).

The cash grant, which will be disbursed through property owners, will cost about $2 billion in total, said Mr Heng as he unveiled the fourth round of support measures in response to the Covid-19 pandemic. The grant will be disbursed by the Inland Revenue Authority of Singapore to property owners from end-July.

Taken together with the property tax rebate, the Government will, in effect, offset about two months of rental for qualifying SME tenants of commercial properties, and about one month for qualifying SME tenants of industrial and office properties.

SME tenants are defined as those with not more than $100 million in annual turnover, based on corporate tax and individual tax returns for the 2019 assessment year. The grant will be available to SMEs with qualifying leases or licences commencing before March 2020.

For qualifying tenants of commercial properties, such as shops, the grant will amount to about 0.8 month’s worth of rent. Together with the property tax rebate announced earlier for 2020, this brings total government support to about two months for these SME tenants.

Those in industrial and office properties will get a grant amounting to 0.64 month’s of rent, bringing the total government support to about one month of rent for these tenants.

SME property owners who run a trade or business on their own property will also be eligible for this grant. More details will be provided via Iras’ website by the end of June.

“We will significantly add to the support for rental costs earlier provided through the property tax rebate for 2020 in the Unity and Resilience Budgets. We will also expect landlords to do something, and that will be legislated,” said Mr Heng, who is also Finance Minister.

The new Bill, to be introduced by the Law Minister next week, will also cover provisions on temporary relief from onerous contractual terms such as excessive late payment interest or charges. It will also allow tenants to repay their arrears through instalments, he added.

“We deliberated on this matter very carefully. The Government does not ordinarily intervene in contracts after they have been entered into. However, as the Minister for Law had explained in his second reading speech on the Covid-19 (Temporary Measures) Bill, in exceptional situations such as this, the Government needs to intervene, through legislation, with temporary targeted steps to safeguard the economic structure for the common good,” Mr Heng said.

If the Bill is passed in Parliament, SME tenants in commercial properties who have suffered a significant revenue drop will benefit from a total of four months of rental relief – shared equally between the Government and landlords.

“Other SME tenants in industrial and office properties will also be given some relief. SMEs also already benefit from temporary relief from rental payment obligations till October. Together, these will provide substantial support on rental costs, for our SMEs,” Mr Heng said.

Government tenants will also receive more rental relief, he said.

Commercial tenants and hawkers will have two more months of rent waived, bringing the total rental waiver to four months for commercial tenants. Stallholders in hawker centres and markets managed by Government agencies will get a total of five months of rental waiver.

Industrial, office, and agricultural tenants of Government agencies will receive one more month of rental waiver, bringing the total to two months of rental waiver.

Mr Heng added that the Government will ensure that these measures flow through to help sub-tenants, many of whom are SMEs.

Source: Read Full Article