ATO Clarifies Related Party Temporary Waiver of Rent

Shelley Banton
Shelley Banton
April 06, 2020
Rent relief COVID

The ATO has clarified the situation where an SMSF owns real property and has been requested by a related party tenant for a temporary waiver or reduction in rent because of the financial impacts of COVID-19.

Charging a related party a price that is less than market value is usually a contravention.

Given the financial impact of COVID-19, will the ATO take compliance action if this occurs?


Where landlords are giving their tenants a rent reduction or waiver because of the financial impacts of the COVID-19, the ATO’s compliance approach for the 2019–20 and 2020–21 financial years is that they will not take action where an SMSF gives a tenant – who is also a related party – a temporary rent reduction or waiver during this period.

Where there are temporary changes to the terms of the lease agreement in response to COVID-19 it is important that the parties to the agreement document the changes and the reasons for the change.

SMSF Auditors will require a signed minute or a renewed lease agreement for the 2020 audit. 

Read the ATO’s FAQ on COVID-19 for SMSFs

Independent SMSF audits by Australia’s most trusted team. Find out more
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