Gov’t announces fresh cut to commercial rent

Gov’t announces fresh cut to commercial rent

More than 200,000 enterprises will pay just 20% of their pre-crisis rent in January and February 2021. According to what Prime Minister Kyriakos Mitsotakis told Parliament on Tuesday, the measure will concern enterprises forced to stay shut during the festive season.

The new measure will therefore affect the sectors of food service, bars and clubs, retail stores, gyms and even enterprises operating as of this week using the click-and-collect system. Those companies will be able to pay even less in rent than what they are paying in December, which is reduced by 40%.

For example, a company that normally pays a monthly rent of 1,500 euros will enjoy a discount of €1,200 in January and February, paying its landlord only €300; for December, it has to pay €900.

The landlords will also get more in compensation from the state for their reduced revenues, getting back 60% of the rent they would have got. Therefore, in the above example, of the monthly rent of €1,500, the landlord will collect €300 from their tenant and €900 from the state, thereby losing only 20% of their takings.

A Finance Ministry official told Kathimerini the government is examining some adjustments to the sectors concerned so as to rule out any enterprises that are showing an increase in their turnover even though they are shut.

For workers at the companies concerned, there will be no increase in their rental discount, with sources saying the 40% cut will continue to apply – without ruling out a small increase to that discount rate.

The same official said the government’s intention is to support the corporations that have observed a major decline in their takings, as the holiday season accounts for 30% of many companies’ annual turnover.

The fear of a series of permanent shutdowns has nudged the government to support businesses further; therefore Mitsotakis told Parliament that the fifth phase of the cheap loans program (known as the “Deposit To Be Returned”), scheduled for January, will also provide for a minimum amount of €1,000 to companies and freelancers.

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