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Solidarity Budget for Covid-19 does not offer additional assistance landlords

by • April 6, 2020 • Property Market NewsComments (0)415

Solidarity Budget for Covid-19, Singapore’s third support package, additional assistance for private landlords or developers

Solidarity BudgetThe Singapore government has announced a third round of support measures in Parliament on April 6, 2020 to help tide businesses, workers and households mitigate the COVID-19 impact.

The new “Solidarity Budget” follows the Unity Budget announced on Feb 18 and the Resilience Budget of Mar 26, and comes as Singapore closes schools and most workplaces for a month for the “first time in our history” to stem the spread of the virus.

The near-lockdown or “circuit breaker” announced on 3 April (Friday) will last a month from 7 April to 4 May 2020. Workplaces that are exempted from closures include those in key economic sectors and essential services, such as food establishments, markets and supermarkets, healthcare facilities and key banking services.

Known as the Solidarity Budget, this third stimulus package will cost a further S$5.1 billion and will be funded by S$4 billion of past reserves.

The extra stimulus will take the government’s COVID-19 related relief measures to about S$59.9 billion, representing 12% of gross domestic product. The overall budget deficit for FY2020 will increase to S$44.3 billion or 8.9% of the GDP.

Colliers’ comments on Solidarity Budget:

Ms Tricia Song, Head of Research for Singapore at Colliers International, said: “We note that the Solidarity Budget consisted mainly of enhanced measures from those announced earlier, targeted at immediate or short term relief, such as increasing wage credits and waiver of foreign worker levy to help businesses keep workers, and bringing forward and increasing cash handouts to Singaporean households.”

She added: “We note that the Solidarity Budget does not offer additional assistance for private landlords or developers. The Ministry of Law will introduce a Bill on 7 April to let businesses and individuals defer certain contractual obligations such as paying rent, repaying loans or completing work, for a period. The Bill will also ensure that property owners pass on the property tax rebate in full to tenants. We urge landlords to work hand in hand with tenants, and pass on the earlier-announced 30-100% property tax rebates (which could amount to 3-10% of annual rent) to tenants.”

“For property-related measures, the rental waiver for industrial, office and agricultural tenants of Government agencies will be increased from 0.5 months to one month.  Stall owners in NEA hawker centres will continue to enjoy three months of rental waivers, while retail tenants will continue to receive two months of rental waivers.”

Selected measures

Measures 3rd support Budget on 6 April Supplementary Budget on 26 March Budget on 18 Feb

 

Beneficiaries
Property tax rebates for qualifying commercial properties including shops and restaurants   100% 15% Retail malls
Property tax rebate for hotels, serviced apartments, tourist attractions, MICE venues   100% 30% Hospitality
Property tax rebate for Integrated Resorts   60% 10% Integrated Resorts operators
Property tax rebate for non-residential properties   30% None Industrial, warehouse, office landlords
Rental waivers for non-residential tenants of state properties

Such as hawker centres, JTC, SLA, HDB, URA, BCA, NParks, and PA

+0.5 month for industrial, office and agricultural tenants; rest remained same 0.5 to 3 months 0 to 1 month Non-residential tenants of government agencies
Deferment of income tax payments for companies and self-employed persons   3 months None Industry-wide
Jobs Support Scheme 75% of monthly wages for every local worker in employment, capped at SGD4,600, for month of April 25% of monthly wages for every local worker in employment, capped at SGD4,600, for 9 months til end-2020 None Industry-wide
Enhanced Jobs Support Scheme for Aviation, Tourism, Food Services, Land Transport, Arts & Culture sector   50- 75% wage offset, capped at monthly wage of SGD4,600, for 9 months til end-2020 None Industry-wide
Foreign worker levy waiver/ rebate The monthly foreign worker levy due in April will be waived.

As early as Apr 21, employers will also receive a foreign worker levy rebate of SGD750 for each work permit or S pass holder.

None None Industry-wide
Cash payout and grocery vouchers to households Additional SGD300 cash payout for every Singaporean adult, and one-off payment of SGD600 by 30 April SGD300-900 SGD100-300 Industry-wide

Source: Colliers International, Ministry of Finance

Mr Desmond Sim, CBRE’s Head of Research for Southeast Asia, said: “The Solidarity Budget aims to tide Singapore through its “circuit breaker” measures to be implemented for a month from 7 April 2020 to 4 May 2020, that will result in schools and most workplaces closing.”

CBRE said that the relevant measures from the Solidarity Budget that may have an impact on Real Estate include:

Enhanced Jobs Support Scheme: 

For the month of April:

  • Raise wage support for all firms to 75% of gross monthly wages
  • Applies to first $4,600 of wages paid in April 2020 for each local employee
First Jobs Support Scheme payout will be brought forward from May to April

Further Measures to Erase Labour Costs 

  • Waive monthly Foreign Worker Levy due in April 2020
  • Provide employers with Foreign Worker Levy Rebate of $750 for each work permit of S pass holder

Further support for Rental Costs 

Property tax rebate for non-residential properties

  • New bill to ensure property owners pass on the Property Tax Rebate for 2020 in full to tenants

Increase rental waiver for industrial, office and argri-cultural tenants of government agencies from 0.5 month to 1 month

Enhanced Self-employed Person Income Relief Scheme 

 To include self-employed persons who also earn a small income from employment work

  • Raise annual value threshold from $13,000 to $21,000
  • Total of about 100,000 self-employed persons will automatically be eligible

Enhanced Support for Households

Solidarity payment

  • One-off solidarity payment of $600 in cash for all adult Singaporeans
Other cash payouts

  • Remaining $300 or $600 from the higher tiers of the enhanced Care and Support Package
  • $300 for each parent with at least one child aged 20 and below
  • $100 Passion Card top-up given in cash for Singaporeans aged 50 and above
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