On 20 January 2011, the Government released a consultation paper
on the proposed
Tax Breaks for Green Buildings program. From 1 July 2011,
businesses investing in eligible assets or capital works which
successfully improve the energy efficiency of their existing
buildings from 2 stars or lower to 4 stars or higher (in accordance
with NABERS Energy rating protocols) will be eligible for a
once-off bonus tax deduction of 50 per cent of the cost of the
improvements. The initiative is aimed at encouraging businesses to
improve their energy efficiency and is welcomed by the commercial
To be eligible, you must own or part-own an eligible existing
office, hotel or shopping centre within Australia. Eligible
office buildings of net lettable area greater than 2,000 square
shopping centres of a gross lettable area that is retail of
15,000 square metres; and
business hotels with certain characteristics.
Furthermore, the entity must be able to demonstrate an ability
to fund the remaining cost of the project that will not be funded
by the tax incentive.
Taxpayers wanting to claim the tax incentive will be required to
obtain a NABERS assessment. The NABERS assessment is required
before and after the proposed retrofit to demonstrate that the
NABERS rating has improved from a rating of 2 stars or lower to a 4
star rating and hence verify energy and emissions savings.
Expenditure eligible for the tax incentive is proposed to
include both capital and non capital expenditure that forms part of
the total cost of the retrofit. However, it is likely that the
Government will introduce a cap on non-capital expenditure eligible
for the grant. To be eligible, expenditure must be incurred between
1 July 2011 and 30 June 2015 (inclusive) and must be approved as
part of the pre-installation application and registration process.
This agreed expenditure will not be increased even if actual
expenditure incurred is higher. Contracts for the associated works
should not be entered into until the taxpayer has received
confirmation that its application for the pre-installation
registration has been successful.
Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
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