Keeping our clients informed is important to us so we regularly publish our thoughts on topics that will be of interest to anyone involved with commercial property. We call them ‘insights’ and we hope you find them of interest.
A question we often get asked is whether a Landlord can pass the cost of Land Tax on to a Tenant as an outgoing in a Lease?
Our answer -
The Retail and Commercial Leases Act contains in Section 30 a specific prohibition on Landlords passing on the cost of Land Tax to a Tenant.
However, there are some situations where the Act and therefore Section 30 does not apply.
Briefly, they are:
-if the Rent exceeds $400,000.00 per annum (exclusive of GST)
-if the Tenant is a public company
-if the Tenant is an insurance company
-if the Tenant is a District council
-if the Lease was prepared prior to 1990
-if the premises are used for a purpose that means the Act does not apply.
So, if your situation happens to be one of the very few where the Act doesn't apply then you can include Land Tax as an outgoing, provided of course that the Tenant is willing to accept it.
As always if you have any questions, please let me know.
RECEIVE INSIGHTS TO YOUR INBOX
- Land Tax
- Can I restrict who my Tenant employs?
- We are merging with Eastern Conveyancing
- Selling a commercial property - Part 2
- Selling a commercial property - Part 1
- End of Tenant Covid Protections
- Air conditioners
- Post Covid Rent Reviews
- Changes to the Retail and Commercial Leases Act - July 2020
- Code of Conduct "Leasing Principles"