The Queensland government’s decision to freeze residential evictions for six months and cancel rent arrears has been criticised by the CEO of the Real Estate Institute of Queensland for placing the burden on property owners.
REIQ CEO Antonia Mercorella said the new measures don’t offer a balance between tenants and property owners.
“It’s just as financially difficult for property owners as it is for rental tenants. It’s not just a matter of pressing pause on mortgage repayments to set and forget while a rent reduction agreement is in place,” she said in a media release on April 9.
The government has also put a moratorium on renters amassing rental debt during the period of their rent reduction arrangement. However, property owners don’t have the same relief on their payments.
They will have to defer their home loan repayments, yet still make them up at a later time. This is consistent with the industry-wide approach to mortgage deferrals for customers impacted by the CCP (Chinese Communist Party) virus, commonly known as the coronavirus.
The Queensland government announced a land tax rebate and relief scheme on April 9, which outlined three months of land tax rebate in the 2019-20 financial year for eligible property owners followed by three months of relief in the 2020-21 financial year which will eventually need to be paid back. The scheme is only for property owners who agree to provide rent relief for tenants affected by the coronavirus downturn.
Former Liberal Queensland premier and current chair of property company Arcana Capital, Campbell Newman, lashed out at the Palaszczuk Labour government’s measures in a post on Twitter.
He said the housing minister’s “Code of Conduct is bad policy, one sided, poorly thought through & would sit comfortably in Venezuela.”
Landlords should look after small tenants & share the pain. However, “Code of Conduct” is bad policy, one sided, poorly thought through & would sit comfortably in Venezuela. Meantime state & local government continue to collect land tax & rates. Coalition should not support this
— Campbell Newman (@CampbellNewman) April 7, 2020
Impact on Investors
Queensland landlord Sally said she would never want to evict someone and made an agreement with a tenant who had asked for a rent reduction from $240 to $150 (US$152 to $95) per week.
“We feel a bit like we don’t really know what’s there for us because those announcements are made to protect the tenants,” she told The Epoch Times.
The indication from Sally’s bank—Westpac—was that should she put a hold on her repayments, the bank would capitalize on the interest and add it to the principal (total balance).
“But we can’t afford to not pay the mortgages because we can’t afford to capitalise on the interest on those properties,” she said.
REIQ said that while rental tenants should not be left without a place to live during the fight against COVID-19, property owners are being made to pick up the tab under the state government’s proposals.
A spokesperson for the Queensland housing department told The Epoch Times in an emailed statement that the pandemic has had a devastating impact on Queensland and they know many are doing it tough. Where hardship is being experienced, property owners are encouraged to speak with their financial institutions to access available supports.
The measures set out by the Department of Housing and Public Works required a mandatory conciliation between tenants and landlords who can’t come to a rent reduction agreement on their own.
Housing Minister Mick de Brenni has been empowered to set out principles for working out a new payable rent that is fair and reasonable and in proportion to what the tenant can afford.
That means that if a tenant has lost 75 percent of their income, their rent should be reduced a proportionate 75 percent. But while tenants have their debts canceled by the government, landlords don’t receive the same waivers for repayments from their banks.
“So while the banks are sort of saying, ‘Yes we’ll help,’ and the government is saying, ‘You can’t evict, you can’t do this, you can’t that’ … It’ll be things like the body corporate and the [local council] rates that will probably get set aside and not paid for a while,” said Sally.
Amendments will be introduced to Queensland’s Parliament after Easter.
To help keep tenants and property owners fully informed, the Queensland government has set up an online rental hub with helpful information and resources is available at www.covid19.qld.gov.au/the-hub.
This article was updated on April 15 to include comments made the Queensland government’s department of housing.