Written by: Syasya Nur
Singapore’s property sector is set to see new changes with the new Fortitude Budget rolled out on 26 May. Deputy Prime Minister (DPM) Heng Swee Keat announced in parliament on 26 May 2020 that $33 billion would be rolled out to help ease the financial circumstances that small and medium enterprises (SMEs), workers and households are facing due to COVID-19.
How will the new Fortitude Budget impact Singapore’s SME Tenants?
1. Expansion of rental relief for SMEs
Under the Fortitude Budget, $2 billion in cash grants has been set aside for qualifying SMEs. This marks the fourth budget rolled out in the year 2020. Along with this year’s property tax rebate, the main goal of this budget is to:
- Offset two months’ rental for qualifying SME tenants of commercial properties.
- Offset one months’ rental for qualifying SME tenants of industrial and office properties.
These rebates are meant to complement the first phase of the circuit breaker exit that started on 2 June 2020, so that SMEs can operate with fewer restrictions and ultimately generate more profit.
However, DPM Heng Swee Keat also stressed that these rebates are but a short-term solution. A complete restoration of business operations is essential for SME owners to recover losses over the past few months, and potentially, losses in months to come.
2. Creation of industry panel for fair leasing practices
Previously, landlords had come under scrutiny for refusing to pass on government tax rebates to tenants. The new budget has taken that into account and will ensure that funds will go directly to tenants.
In addition, five SME groups in Singapore have come together to form the The Fair Tenancy Framework Industry Committee (FTFIC) to represent more than 10,000 firms and advocate for fairer leasing practices The FTFIC submitted a position paper and recommendation to the Ministry of Law and Ministry of Trade and Industry stating 15 key recommendations for fairer leasing agreements.
The FTFIC and COVID-19 (Temporary Measures) Act seeks to tip the power scales in favour of the tenants and give tenants some leverage in reshaping contracts in time to come.
SME Tenants are advised to read up on Tenant-Landlord Rights in Singapore in order to protect themselves.
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