Affected SME Tenants Gets Relief From Rental Costs From Government and Landlords
Businesses all over are affected by the pandemic. The usual buzzing business scene in Singapore is no better. Traders, especially those renting shops and spaces, are profoundly affected during the circuit breaker period. Moreover, some businesses are not making ends meet during this period. Hence, the attentive government of Singapore will provide cash grant for rental relief. The cash grant will relieve them from rental costs as they have no or limited business activity during the circuit breaker duration.
Stabilising the Affected Ones
Businesses that are renting are usually made up of small and medium enterprises (SMEs). Most of these SMEs rely on more massive malls to bring in the crowd. There are also SMEs renting shops and spaces directly from the government facilities. Public or government facilities would regularly have groups of people utilising it. Hence, it is business as usual. But, when Singapore implements the circuit breaker to curb the outbreak of COVID-19, what was normal can no longer sustain enterprises. Therefore, SMEs are mostly affected, and the government is sending them help to deal with their problems.
Sharing the Rental Relief
For SME tenants, rental costs are their top priority to ensure their business can remain where they are. But with not much revenue, rental is eating up their savings. Hence, the government will provide them with a cash grant to offset their rental costs. Moreover, if SMEs are not making much in recent months, their landlord may be obliged to grant rental waivers. The government aims to give these SME tenants in commercial properties with a total of four months of rental relief. The plan is to share this rental relief between landlords and the government.
How It Works?
The Singapore government, through the Inland Revenue Authority of Singapore, will disburse the cash grant to property owners. The landlords then must pass on the benefit to their SME tenants. With the property tax relief in place, the government will offset two months of rent. Meanwhile, the landlords will waive another two months rental if the SME tenants could not make much revenue. Through the grant, the government aims to offset one month of rent for eligible tenants of industrial and office properties. Qualified SME tenants are based on annual corporate tax and individual tax returns for 2019 assessment year.
Tenants renting from the government such as commercial tenants and hawkers will get an extra two months of rental waiver, making the total of four months rental waiver. Stallholders in markets and hawker centres managed by government agencies will get five months of rental relief. Office, industrial and agricultural tenants of government agencies will get a total of two months rental waiver.
New Plan, New Bill
The government plans to ensure landlords bear part of the responsibility through a new Bill. It will also cover provisions for temporary relief from excessive late payment charges. The new Bill will allow tenants to repay arrears in instalments.
For more information, please see Fortitude Budget 2020 Summary.