Ensure landlords pass on tax rebate

Source : Straits Times - 5 Mar 2009

I READ with interest Monday’s report, ‘Mapletree rejects appeal for rent cuts’, and would like to mention my own problems with my landlord, Wheelock Properties.

During this year’s Budget speech, Finance Minister Tharman Shanmugaratnam announced that, as part of the Government’s efforts to lighten the tax burden of businesses in the coming year, it would give a 40 per cent property tax rebate for industrial and commercial properties.

A day after that, I wrote to Wheelock to ask if it would heed the Government’s call and pass on the savings from the rebate to tenants of Wheelock Place. I highlighted that a number of landlords have announced that they would do so, with CapitaLand the first to respond with a commitment to pass on all savings from the tax rebate.

I also highlighted to Wheelock Mr Tharman’s comments, in which he said: ‘The Government strongly urges landlords to pass on the benefits of this rebate to their tenants.’

To my disappointment, the first response I received from Wheelock a week later was non-committal, saying ‘any rebate passed on to the tenants is at the sole discretion of the landlord’.

In a second response to my follow-up e-mail messages a week later, Wheelock said it would give an update by the end of February.

Last week, in a third response to my e-mail messages, it said: ‘There is no confirmation yet on the property tax rebate, we will revert only in April.’

The only conclusion I can draw from its responses is that Wheelock has no intention of passing on the benefits of the rebate to its tenants.

While I cannot force it to do so, my question is whether the Finance Ministry can ’strongly urge’ landlords to do the right thing. If not, how can tenants like us, who had to pay more than double in rent when leases were renewed in late 2007, benefit from this rebate?

As MP Amy Khor noted in Parliament on the Jobs Credit scheme: ‘Since it is a cash injection from government coffers, arguably, the Government has the moral authority to compel recipients of Jobs Credit to save jobs for Singaporeans - as much as reasonably possible. Otherwise, the scheme should be tweaked to ensure some accountability by companies.’

Similarly, as pointed out by the Finance Minister, the 40 per cent property tax rebate will cost the Government about $800 million. If landlords keep these savings, how will it benefit small and medium-sized enterprises?

Alan Lee