Landlords and businesses who own the locations they operate in can receive up to 50% in building tax cuts from the government under the ongoing second wave of COVID-19.
The building tax cuts are similar to those introduced during the first wave last year, but with enhancements targeted at businesses who cannot operate during the ongoing pandemic.
By offering to discount building tax, the government hopes that landlords will reduce rental for tenants who are experiencing decreased economic activity. For businesses that own their own locations, the tax cuts are aimed at reducing their overall financial burden and help with cash flow.
The Minister of Home Affairs YB Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Hj Abu Bakar Hj Apong announced the building tax cuts at the COVID-19 press conference earlier today.
Only commercial buildings under the jurisdiction of the municipalities (bandaran) of Bandar Seri Begawan, Tutong, and Kuala Belait and Seria are included under the measures.
Landlords must be willing to reduce tenants’ rent by at least 10% for at least five months since August 2021 to be eligible for the tax deductions for the financial year of 2021.
The cuts are proportionally tiered to the discount offered by landlords to tenants.
Landlords who have cut rental by 10% to 14% will receive tax relief of up to 20%; those lowering rental by 15% to 19% will receive relief of up to 35%; and those lowering rental by 20% or more will receive relief of up to 50%.
Meanwhile businesses who are operating the premises they own – and have either been significantly impacted or been ordered to close under the second wave – will also be eligible for building tax cuts of up to 50% from August to December 2021.
The applicable businesses are: fitness centers, indoor and outdoor sports facilities, beauty saloons and barbershops, internet cafes, leisure centres, cinemas, children’s playgrounds, daycares, driving schools, galleries, real estate, convenience stores and supermarkets, eateries, and tailors. Businesses in general retail and industry can also apply.
The minister highlighted that landlords with overdue building tax should at least pay at least 10% of their unpaid sum in order to be eligible for the tax relief. Applications from landlords who were given tax relief last year but have still not settled their overdue payments will not be considered.
Private limited or sendirian berhad companies that own commercial properties who have applied and been given the 50% corporate tax discount by the government for 2021 cannot apply for the building tax cuts.
Landlords and businesses that are given the tax relief will need to settle their building tax for 2021 and 2022 within the period specified by the Ministry of Home Affairs, or face losing the relief given.
The minister added that each applications would be assessed on a case-by-case basis and should be applied to the respective municipality departments by April 30, 2022.
Businesses can inquire about the building tax deductions to:
- Bandar Seri Begawan Municipal Department at 2232424 ext firstname.lastname@example.org
- Kuala Belait and Seria Municipal Department at email@example.com
- Tutong Municipal Department at firstname.lastname@example.org.