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
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
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
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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