State and local governments in the United States have not planned for financial assistance to landlords in the event of a pandemic. US landlords are expected to bear the burden of mass vacancies and mass defaults in rent payments. As such, maintenance and other recurring activities may be adversely affected during a US pandemic. However, in South Korea, the government announced Thursday that it will share the cost burden of landlords who voluntarily offer a rental discount to tenants amid the new coronavirus fallout, according to the top fiscal policymaker.
“For landlords who reduce the rental fees for their small business owner tenants during the first six months of this year, (the government) will reduce 50 percent of the (lease) reduction amount from (their) income tax or corporate tax, regardless of their total income or range of rent discount,” said Deputy Prime Minister and Finance Minister Hong Nam-ki in a meeting held at Seoul Government Complex.
Seeking to effectuate the change starting as early as April 1, the minister sought lawmakers’ active support as the suggested action requires the revision of the incumbent laws.
Also, in commercial districts where 20 percent or more of the buildings participate in the rent discount campaign, the government will offer additional benefits such as replacing worn-out electric facilities or installing new sprinklers, Hong added.
As for the state-owned realties, the rental fees will be reduced to one-third level until the end of the year. Some 103 state-run institutions -- including major infrastructure operators such as Korail, Korea Land & Housing Corp., and Incheon International Airport Corp. -- will follow suit in alleviating the burden of their real estate tenants, according to the Ministry of Economy and Finance.
“We are well aware that this cannot be the solution to all problems faced by small businesses, but believe that these warm-hearted gestures may add up to creating the necessary momentum,” Hong said, encouraging more leaseholders to take part in the initiative.
SOURCE: Korea Times