Government financial support: What's available for your real estate business?

UPDATE: On Tuesday 21 July 2020, the Federal Government announced the extension of the JobKeeper wage subsidy scheme (previously due to expire on 27 September 2020) until 28 March 2021 but with new rates and reapplication of the turnover tests. The temporary boost to the JobSeeker program will also now be available until the end of this year at a reduced rate and with additional eligibility criteria. Click HERE to learn more.

The past few months have been some of the most tumultuous in the history of Queensland real estate. The number of rapid State and Federal measures instigated to contain the coronavirus (COVID-19) pandemic have temporarily changed the way that we not only live our lives, but also the viability of many people's livelihoods.

Prior to yesterday's wage subsidy announcement by the Federal Government, some real estate businesses were wondering how they were going to survive the next few weeks, let alone months. While the JobKeeper package may not provide a solution for every business in every industry, it will certainly help many in the real estate sector who are struggling with drastically reduced incomes at present. The Federal Government has so far announced more than $300 billion in financial assistance packages for individuals and businesses. The Queensland Government has also provided further assistance for businesses in the form of payroll tax relief.

While no one knows how long this crisis will last, it is heartening that our nation has the means to provide such significant financial assistance to those severely impacted by this pandemic. The REIQ has prepared this overview of the business support packages currently available, which should be utilised if your real estate business is in need of financial support.

Federal Government Support for Business

The Australian Government is supporting Australian businesses to manage cash flow challenges and retain employees. Assistance includes cash flow support to businesses and temporary measures to provide relief for financially distressed businesses:

• JobKeeper
• Boosting cash flow for employers.
• Temporary relief for financially distressed businesses.
• Increasing the instant asset write-off.
• Backing business investment.
• Supporting apprentices and trainees.

JobKeeper payment

If your business has been significantly impacted by the coronavirus you will be able to access a wages subsidy to continue paying your employees. Under the JobKeeper program, you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of six months. This assistance will help you keep staff and help you restart when the crisis is over.

For more information specifically for real estate businesses, click here.

Boosting cash flow for employers

The government has enhancing the Boosting Cash Flow for Employers measure it announced on 12 March 2020. The government is providing up to $100,000 to eligible small- and medium-sized real estate businesses with a minimum payment of $20,000.

These payments will help real estate businesses with cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff. Those small- and medium-sized real estate businesses with aggregated annual turnover under $50 million and that employ staff are eligible.

Under the enhanced scheme, employers will receive a payment equal to 100% of their salary and wages withheld (up from 50%), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. And an additional payment is also being introduced in the July-October 2020 period.

Eligible real estate businesses will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means that eligible real estate businesses will receive at least $20,000, up to a total of $100,000 under both payments.

For more information, click here.

Temporary relief for financially distressed businesses

The Federal Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the coronavirus (COVID-19) crisis.

The Australian Tax Office (ATO) will tailor solutions for owners or directors of business that are currently struggling due to the coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

For more information, click here.

Increasing the instant asset write-off

The Federal Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.

For more information, click here.

Backing business investment

The Federal Government is introducing a time-limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short-term, by accelerating depreciation deductions. Real estate businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset's cost.

For more information, click here.

Supporting apprentices and trainees

The Federal Government is supporting small real estate businesses to retain any apprentices and trainees. Eligible real estate employers can apply for a wage subsidy of 50% of the apprentice's or trainee's wage for nine months from 1 January 2020 to 30 September 2020. Where a small real estate business isn't able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

Real estate employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter). Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

For more information, click here.

Queensland Government Support for Business

Coronavirus payroll tax relief

Your real estate business may be eligible for one or more of a range of payroll tax relief measures as a result of the impacts of coronavirus. These include:

• refunds of payroll tax for two months.
• a payroll tax holiday for three months.
• deferral of paying payroll tax for the 2020 calendar year.

As part of this relief package, the refund and payroll tax holiday don't have to be repaid. So, are you eligible? If you're an employer (or part of a group of employers) who pays $6.5 million or less in Australian taxable wages, you may receive an email about a:

• refund of your payroll tax for two months.
• payroll tax holiday (i.e. no payroll tax to be paid) for three months.

You can also apply for a deferral of payroll tax for the 2020 calendar year (If you have already applied for a deferral, you don't need to reapply Äì it will be extended.) If you don't receive an email, or you are unsure about your eligibility, complete the refund/holiday application form.

If you are an employer (or part of a group of employers) who pays more than $6.5 million in Australian taxable wages and have been negatively affected (directly or indirectly) by coronavirus, you can apply for a:

• deferral of payroll tax for the 2020 calendar year. If you have already applied for a deferral, you do not need to reapply Äì it will be extended.
• refund of your payroll tax for two months.

A business is directly or indirectly affected by coronavirus if their current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected compared with normal operating conditions.

For more information about this initiative, click here.

For more information about our Covid-19 initiatives, click here.