Tax Breaks For Green Buildings
From 1 July 2011, businesses that invest in eligible assets or capital works to improve the energy efficiency of their existing buildings – from 2 stars or lower to 4 stars or higher – will be able to apply for a one-off bonus tax deduction.
Tax Breaks for Green Buildings will enable businesses to claim a bonus tax deduction of 50 per cent of the cost of the eligible assets or capital works.
The Tax Breaks for Green Buildings initiative is expected to provide a boost of around $1 billion over the life of the scheme to help ‘green up’ existing buildings right across the country. It will help unlock significant energy efficiency by giving businesses a clear incentive to save energy in their buildings.
In Summary:
- The tax break only applies to retro-fitting of existing buildings. Costs of building new buildings will not qualify.
- The increase in energy efficiency has to be assessed by assessors accredited under the National Australian Built Environment Rating System (NABERS). This assessment must be made both before the projects starts and after it is completed.
- The qualifying expenditure is capital expenditure and certain other expenses that results in the improvement of energy efficiency of the building from a 2 star or less to a 4 star or more NABERS energy efficiency rating.
- Qualifying expenditure can only be incurred (contracts entered into) after the taxpayer's application has been assessed by the approved NABERS assessor and notification of approval has been given to the applicant.
- The expenditure must be incurred by the original proposed completion time in the application but no latter than 30 June 2015 (but subject to a grace period of up to six months if the delay is caused by factors outside the applicants control).
- The 50% bonus tax deduction will be provided after completion of the project and the Department of Climate Change has issued a certificate of tax breaks entitlement.
- The total cost of this tax breaks program will be capped at $1 billion, which may be broken up to an annual cap over the 4 years of operation.
- The Government is considering either a first come first served basis or a competitive approach to approving the applications that fit under the annual cap. Under the "first come first served" basis all qualifying applications would be approved until the annual cap has been reached. Under the competitive approach there will be an assessment of each application based on set criteria to identify the projects with the higher energy efficiency increase, these will be given priority over others.
- There may be caps on eligible expenditure per project such as a per room cost limit (for hotels) or a set maximum per $/m2 e.g. $40 per m2 of floor space.
- There will be a compliance regime that will ensure a fair and accurate assessment and certification process as well as preventing inappropriate and fraudulent claims etc.
For more information, please download the GBF Fact Sheet below.
 | GBF Fact Sheet | PDF, 44Kb |
