Further to our recent updates on the Covid-19 related supplementary budgets from the Singapore Government, we summarise below on the Rental Relief support that has now been passed into law:
Direct Government Assistance for Rental Relief
The Government will give relief of the rental costs of SME tenants (those with < SG$100 million in annual turnover) with qualifying leases commencing before 25 March 2020, as follows:
As part of the Fortitude Budget, the Government will provide additional cash grants equivalent to approximately 0.8 months of rent for qualifying commercial properties, and approximately 0.64 months of rent for industrial and office properties.
- Taken together with the Property Tax Rebate granted in the Resilience Budget, the Government will provide an equivalent of approximately 2 months of rent for qualifying commercial properties, and approximately 1 month of rent for industrial and office properties.
- To ensure that these measures benefit the intended beneficiaries, the government has directed that SME tenants in qualifying commercial properties receive 2 months’ waiver of their base rental, and SME tenants in industrial/office properties receive 1 month’s waiver of their base rental.
- This rental waiver will apply to April and May 2020 for SME tenants in qualifying commercial properties, and April 2020 for SME tenants in industrial/office properties, as long as their leases or licenses are in force on 1 April 2020.
Additional Rental Relief to be provided by Landlords
SMEs who have seen a > 35% in their average monthly revenue in the period of April to May 2020 in comparison to same period in 2019 due to COVID-19, will receive an additional 2 months’ waiver of base rental for qualifying commercial properties, and an additional 1 month’s waiver of base rental for industrial and office properties. These additional rental waivers will be borne by the landlord, and will be applied to June and July 2020 for SMEs in qualifying commercial properties, and May 2020 for SMEs in industrial/office properties, as long as their leases or licences are in force on 1 April 2020.
- Taken together, eligible SMEs can thus receive a total of 4 months’ waiver of base rental for qualifying commercial properties, and a total of 2 months’ waiver of base rental for industrial and office properties. The rental waivers can be offset against any previous direct monetary assistance provided by the landlord to the tenant (or subtenant) from February 2020 onwards and/or any passing on of the Property Tax Rebate from the property owner to his tenant. The rental waivers will also apply to eligible SMEs who are subtenants.
- The landlord can apply for an assessment of the tenant’s or (subtenant’s) eligibility for the relief within a specific time. The case will be examined by an assessor, who will ascertain the tenant’s (or subtenant’s) eligibility.
- The landlord may also seek an assessment on the grounds of financial hardship if they are unable to provide the additional rental waiver. This will take into consideration whether rental income forms a substantial part of their total income and the annual value of their properties.
How the rental waivers will be implemented
From end-July 2020, IRAS will issue a notice of cash grant and disburse the Government cash grant to qualifying property owners. Property owners are required to serve a copy of the notice to their tenants, or their master tenants. Master tenants who receive a copy of the notice are required to serve a copy of the notice to their sub-tenants. Once the notice of cash grant is received, the rental is treated as waived under the Act. Eligible tenants do not need to do anything to obtain the rental waiver.
Eligible tenants do not need to pay rent for the period covered by the rental relief framework. If rent has already been paid, tenants can either apply the rental waivers to the next immediate month(s) of rent, or if this is not possible, get a refund from their landlords.
Please see for here more details.
We hope this is helpful, and as always, your account manager or any of the team at Stepping Stone will be pleased to run through this in more depth so please fee free to reach out.