Knowledge Highlights 27 January 2025
Provisions of Covid-19 (Temporary Measures) Act 2020 imposing duty on landlords to transfer benefit of 2020 property tax rebates to tenants in force from 22 April 2020
On 22 April 2020, Part 6 of the Covid-19 (Temporary Measures) Act 2020 (“Act”) came into force. This brings into effect provisions in the Act that impose a duty on owners of non-residential properties to transfer to their lessees and licensees the benefit (“benefit”) that the owners received from any reduction in property tax in response to the Covid-19 epidemic. The provisions allow the lessees and licensees to take action against the owner for failing to do so, and for parties to bring disputes in relation to the transfer of the benefit before a Valuation Review Panel (“Panel”).
It is expected that authorities will issue in due course subsidiary legislation setting out the prescribed lessees, licensees, tax remissions and methods via which the benefit may be passed.
1. Obligation to transfer tax rebate benefit
The Act imposes the following obligations (“Obligations”) on an owner of non-residential property, where the property is leased or licensed by the owner (“owner”), who benefits from a prescribed remission of property tax:
- The owner must pass the benefit on to a prescribed lessee or prescribed licensee (“tenant”) in the amount or to the extent, in the manner, and in or by the time prescribed; and
- The owner must keep records evidencing that the owner has passed on the benefit for a period of three years after the end of the period to which a prescribed remission relates.
The Obligations apply whether the prescribed tax remission was made before, on or after the date of commencement of the relevant provisions of the Act.
The Act provides that an owner who, without reasonable excuse, fails to fulfil any one of the Obligations shall be guilty of an offence and shall be liable on conviction to a fine not exceeding S$5,000.
2. Manner in which benefit is passed to be prescribed
The manner in which the benefit may be passed may be prescribed as a single method, or a combination of methods, which are not limited to:
- A payment of money, whether as a lump sum or by way of instalments; and
- An off-set against or a reduction of the whole or any part of any rent or licence fee payable by the tenant to the owner.
The owner must not subject the passing of the benefit to any condition (whether a condition precedent or subsequent), including any change to any term or condition of the lease or licence agreement with the tenant. Any such condition which the owner purports to impose is void.
3. Disputes in relation to transfer of benefit
The owner or tenant may apply for a dispute to be heard and determined by a Panel for the following issues:
- Whether the owner is required to pass on the benefit pursuant to the provisions of the Act;
- Whether the owner has complied with the obligation to pass on the benefit required by the provisions of the Act; and
- Whether the owner has failed to pass on the benefit in the amount, extent, manner or time of the passing of such benefit.
The Panel may make further directions for compliance by the owner. The Act provides that applications to the Panel must be determined, having regard to the nature and complexity of the dispute, as soon as is reasonably practicable.
Determinations and further directions made by the Panel may, with leave of the court, be enforced in the same manner as a judgment or an order of the court to the same effect. Such determinations and further directions may be appealed to the High Court.
Reference materials
The following reference materials are available on the Singapore Statutes Online website sso.agc.gov.sg and the Ministry of Law website www.mlaw.gov.sg:
- Covid-19 (Temporary Measures) Act 2020 (Commencement) (No. 3) Notification 2020
- Covid-19 (Temporary Measures) Act 2020
- Second Reading Speech by Senior Minister of State for Finance Lawrence Wong on Covid-19 (Temporary Measures) Bill 2020
Further information
Allen & Gledhill has a Covid-19 Resource Centre on our website www.allenandgledhill.com that contains knowhow and materials on legal and regulatory aspects of the Covid-19 crisis.
In addition, we have a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at covid19taskforce@allenandgledhill.com.
