In Australia, the attractiveness for developers and investors of developing green buildings has been mainly due to their marketability, as there has been little in the way of incentives offered by either the state or federal governments. Whereas in the UK, the Government has created incentives to build and use green buildings in its 2007 budget, by introducing a stamp duty exemption for zero-carbon homes. It is anticipated that this initiative will encourage more of these types of homes in the future.
A zero-carbon home is described as:
'one that does not consume fossil fuels for heat and power. It is highly insulated and uses renewable energy to power its needs over a year through microgeneration.'
Full stamp duty relief will apply to zero-carbon homes purchased for less than UK£500,000 (AU$1,250,000). Zero-carbon homes purchased for more than this amount will benefit from a stamp duty reduction of UK£15,000 (AU$37,000). Stamp duty relief will only be available at the first point of sale.
The UK Government aims to have all newly built homes classified as 'zero-carbon homes' by 2016. It expects that by 2050 about one third of the housing stock will have been built since 2006. Therefore, new homes will have a vital role to play in helping the UK Government meet its own target of a 60 per cent reduction in carbon emissions by 2050.
Although the stamp duty relief will expire in September 2012, the UK Government intends to review the effectiveness of this strategy before then, to consider whether to extend the relief beyond that time period. Other proposed green measures include, the introduction of a requirement to use a proportion of recycled building materials in the construction of homes, and the restriction of carbon used in the manufacturing of materials and construction.
While the main stakeholders in the UK construction industry have welcomed this initiative; it remains to be seen whether Australian state or federal governments will implement similar fiscal incentives to encourage the development of green buildings and homes in Australia.
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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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