For most of us, the ever-changing COVID-19 situation has disrupted our old habits, patterns and way of living. However, for business owners, the unpredictability of when the next wave of infections will arrive or what shape the government’s response will take has not only had a profound impact on their lifestyles but also on their livelihood.
Recognising this, the government has put in place a number of measures to help manage the economic consequences of COVID-19 on businesses, one of which being the provision of rental support to eligible business owners.
If you are a business owner who is renting or who owns commercial properties in Singapore, this article will shed light on:
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What is the Rental Support Scheme?
The Rental Support Scheme is part of the slate of support measures by the government to help businesses in Singapore cope with the impact of tighter COVID-19 restrictions during the Phase Two (Heightened Alert) (“P2(HA)”) periods.
The scheme was first announced in May 2021 in response to the first P2(HA) period from 16 May 2021 to 13 June 2021. Subsequently, the scheme was extended twice:
- The first time following a second announcement in July after the nation entered into its second P2(HA) period from 22 July 2021 to 18 August 2021, and
- A second time following a one-month extension to Singapore’s Stabilisation Phase from 27 October 2021 to 21 November 2021.
Accordingly, eligible tenants/owner-occupiers can look forward to receiving up to three pay-outs. The measures for both periods are consolidated in the following table:
|Rental Support Scheme measures
|First P2(HA) period
(16 May 2021 – 13 June 2021)
|Second P2(HA) period
(22 July 2021 – 18 August 2021)
|Extension of Stabilisation Phase
(27 October 2021 – 21 November 2021)
|Qualifying tenants of Government-owned commercial properties
|4-week rental waiver
|4-week rental waiver
|4-week rental waiver
|Qualifying tenant-occupiers and owner-occupiers of privately owned commercial properties
|Amount of cash payout
|For tenants – 0.5 month of latest contracted gross rent within the period of 14 May 2021 to 29 May 2021.
For owner-occupiers – 0.5 month of the property’s Annual Value (i.e. 0.5 x Annual Value / 12) as at 14 May 2021.
|For tenants – 0.5 month of latest contracted gross rent within the period of 22 July 2021 to 18 August 2021.
* Landlords will be required to provide an additional 0.5 month rent to match the amount provided by the government.
For owner-occupiers – 0.5 month of the property’s Annual Value (i.e. 0.5 x Annual Value / 12) as at 22 July 2021.
|For tenants – twice the amount of the second payout, or 1 month of latest contracted gross rent within the period of 27 September 2021 to 21 November 2021 if they did not receive the second payout.
For owner-occupiers – twice the amount of the second payout, or 1 month of the property’s Annual Value (i.e. 1 x Annual Value / 12) as at 27 September 2021 if they did not receive the second payout.
* The rent payout will be granted in the form of a rental waiver under a separate Rental Waiver Framework. More information on the Rental Waiver Framework is available here.
Despite the similarities in their names, the Rental Support Scheme is not to be confused with the Rental Relief Framework, which came into force in July last year. The two schemes differ in the following ways:
- The mode of rental relief granted has changed – Under the Rental Relief Framework, the cash grants were given to the landlords, who would then be required to provide rental waivers to their tenants. On the other hand, eligible tenants will receive pay-outs directly from the government under the Rental Support Scheme.
- The amount of relief granted is different – The Rental Relief Framework offered tenants of qualifying commercial properties 4 months of rental relief, and tenants of other non-residential properties 2 months of rental relief. Under the Rental Support Scheme, however, the amount of relief granted has been calibrated to reflect the lower severity of the P2(HA) measures and the Stabilisation Phase as compared to the Circuit Breaker period in 2020, the duration of the respective restrictions, and the expected impact on businesses given that they would have implemented their own solutions to adapt to the COVID-19 situation.
- The time periods of the two schemes are different – The Rental Relief Framework covered tenants with leases effective between 1 April and 31 July 2020 whereas the qualifying period under the Rental Support Scheme coincides with the P2(HA) periods. The details of the qualifying period are discussed in the following section.
Are You Eligible for the Rental Support Scheme?
To be eligible for the Rental Support Scheme, you must meet the following criteria:
- General eligibility conditions for all pay-outs:
- You must run a small and medium-sized enterprise or an eligible non-profit organisation with annual revenue not exceeding S$100 million, based on FY2019 or later.
- You must be either a tenant or owner-occupier of a qualifying commercial property or operate based on qualifying commercial use.
- Further eligibility conditions for the first pay-out:
- If you are a tenant, you must have entered your lease or licence before 14 May 2021. Your lease or licence must also have been in force anytime during 14 – 29 May 2021. Additionally, your lease or licence must have been stamped before 28 May 2021.
- If you are an owner-occupier, you must have occupied and operated a business anytime during 14 – 29 May 2021.
- Further eligibility conditions for the second pay-out:
- If you are a tenant, you must have entered your lease or licence before 20 July 2021. Your lease or licence must also have been in force anytime during 22 July 2021 – 18 August 2021. Additionally, your lease or licence must have been stamped before 3 August 2021.
- If you are an owner-occupier, you must have occupied and operated a business anytime during 22 July 2021 – 18 August 2021.
- Further eligibility conditions for the third pay-out:
- If you are a tenant, you must have entered your lease or licence before 24 September 2021. Your lease or licence must also have been in force anytime during 27 September 2021 – 21 November 2021. Additionally, your lease or licence must have been stamped before 8 October 2021.
You can also refer to the flowchart below to determine your eligibility under the Rental Support Scheme for the pay-outs. Alternatively, you can use the Inland Revenue Authority of Singapore (IRAS)’ eligibility checkers to check your eligibility for the first, second and third pay-outs (click here for the third pay-out eligibility checker for tenants, and here for the third pay-out eligibility checker for owner-occupiers).
For the avoidance of doubt, you can be eligible for all the pay-outs provided that you meet the criteria for all of them.
What are eligible non-profit organisations?
In relation to the Rental Support Scheme, an eligible non-profit organisation is defined as one of the following types of entities:
- Registered or exempt charities;
- Members of the National Council of Social Service;
- National sports associations;
- National disability sports associations;
- Specified arts and culture societies; or
- Specified trade associations.
What is a qualifying commercial property/qualifying commercial use?
One of the key eligibility criteria under the Rental Support Scheme is that you have to be a tenant/owner-occupier of a qualifying commercial property or operate based on qualifying commercial use.
Qualifying commercial uses include uses as retail shops, cinemas, restaurants, premises of tourist attractions and sports and recreational buildings. The full list of qualifying commercial uses can be found here.
Tenants and owner-occupiers who engage in criminal activity are ineligible
Do note that tenants and owner-occupiers who are reasonably suspected or found to have engaged in any criminal activity in the course of carrying on its trade or business can be denied disbursement of any Rental Support Scheme payout. This is even if they meet the eligibility criteria stated above.
Criminal activity refers to simply any activity which, if carried out, is a criminal offence. For example, money laundering and gambling.
How Do You Apply for the Rental Support Scheme?
For most eligible tenants and owner-occupiers, you will receive the cash pay-out automatically without having to submit an application. You will be notified of your eligibility to receive cash pay-out by post. Alternatively, you can log into the myTax Portal from 6 August 2021 to view an electronic copy of the letter.
The pay-outs will be disbursed according to these timelines:
- For the first pay-out: From 6 August 2021
- For the second pay-out: From 22 September 2021
- For the third pay-out: From 26 November 2021
However, you will not receive your cash pay-out automatically if you are a:
- Tenant who rents only part of a property;
- Tenant who rents a mixed-use property, one of which is a commercial use; or
If you believe that you are eligible for the first pay-out, but come under one of the above three categories, or do not receive your pay-out notification by 6 August 2021, you can apply for the pay-out at the IRAS website with your Singpass or Corppass from 16 August 2021 to 15 October 2021.
Similarly, eligible applicants who do not receive their pay-out notification for the second pay-out by 22 September 2021 can apply for the pay-out via IRAS from 29 September 2021 to 12 November 2021.
The third pay-out will be automatically disbursed to tenants and owner-occupiers eligible for the second pay-out. If you had not been eligible for the second pay-out but are now eligible for the third one, you can apply for the third pay-out from 10 December 2021 to 21 January 2022.
When filling in your application, you will need to submit the following documents together with the application:
- A copy of your lease/licence/tenancy agreement; and
- Financial Statement or Statement of Accounts (if you had not filed an income tax return to IRAS for the Financial Years ending 2019, 2020 or 2021 (whichever earlier)) or if that is not available, then your business’ latest accounts up till 31 Mar 2021.
Your application will be processed within 2 months from the date of submission. IRAS may contact you if they need more supporting documents to process your application.
The pay-out will be disbursed to you via GIRO or PayNow if you have registered these details with IRAS. If not, the pay-out will be made to you by cheque, which will be sent to your registered address.
By providing rental waivers, the Rental Support Scheme aims to help Singapore businesses grapple with the evolving pandemic situation. As mentioned above, tenants and owner-occupiers are to receive direct cash pay-outs under this scheme. However, for tenants of privately owned commercial properties, there is still a component under the second pay-out where landlords are required to match the rental support provided by the government.
In the event that your landlord refuses to provide you with rental support, you may wish to consult with a lawyer who might be able to advise you on the legal steps that you can take.
If you require legal advice on claiming rental support under the Rental Support Scheme, you may consult with experienced lawyers here.