Temporary rent reduction due to COVID-19

If your SMSF own a real property and wants to give the tenant – who can be a related party – a reduction in rent because of the financial impacts of the COVID-19. Charging a related party a price that is less than market value is usually a contravention. Given the impacts of the COVID-19, will the ATO take action if you do this?

Some landlords are giving their tenants a reduction in or waiver of rent because of the financial impacts of the COVID-19 and ATO understands that you may wish to do so as well. ATO’s compliance approach for the 2019–20 and 2020–21 financial years is that ATO will not take action where an SMSF gives a tenant – who is also a related party – a temporary rent reduction during this period.

Therefore auditor will not report any contraventions to ATO if you have give the tenants the temporary rent reduction due to COVID-19.