The Tax Breaks for Green Buildings Programme was announced as part of the 2010 Federal Government election commitment.
The Department of Climate Change and Energy Efficiency released the Tax Breaks for Green Building Policy Consultation Paper on 20 January 2011 and is seeking comment and submissions from the real estate sector by 18 February 2011.
The Tax Breaks Programme which is expected to commence on 1 July 2011 and to run for a period of 3 years is designed to provide a bonus tax deduction of up to 50 per cent of the cost of eligible assets or capital works as an incentive to invest in works which will improve the energy efficiency of existing buildings from a 2 star NABERS (National Australian Built Environment Rating System) Energy rating or lower to a 4 star NABERS Energy rating or higher.
The Tax Breaks Programme has been the subject of some discussions particularly as to whether the policy of limiting it to only those buildings which currently have a NABERS Energy rating of 2 stars or less with an eligibility criterion that any improvements or works must result in the building's NABERS Energy rating upon completion achieving a minimum of 4 stars is too restrictive.
Another issue identified with the policy is that the bonus tax deduction cannot be accessed until the works are complete and a NABERS Energy rating of 4 stars or more has been achieved and verified. This means that it may be at least 3 years after the works have commenced before the building owner is entitled to the bonus tax deduction, assuming a 4 star or higher NABERS Energy rating is achieved.
Whilst the policy behind the tax breaks programme is commendable there is a view that the eligibility test may be too limiting and the manner in which the Tax Breaks Programme is implemented means that it may not be as attractive to industry as expected.
The Consultation Paper raises a number of issues in relation to the Tax Breaks Programme and seeks the industry's response to specific questions in relation to the Programme. This is your opportunity to have your say in relation to the Tax Breaks for Green Buildings Policy. Submissions are due by Friday 18 February 2011 and we encourage everyone with an interest in the built environment sector to consider the Consultation Paper and make a submission. We can assist with any submissions if required.
The Government has established a Tax Breaks Reference Group to assist with the implementation of the Tax Breaks Programme. Members of the Reference Group includes representatives from the Property Council of Australia, Facilities Managers Association and Green Building Council and our Lexia Wilson who is a partner in our Real Estate Group. Lexia is also a member of the Federal Government's Commercial Building Disclosure Implementation Forum, and the Commercial Building Disclosure Programme's Shared Services Expert Group
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