Tax breaks for Green Buildings
Julia Gillard,Penny Wong,Wayne Swan
posted Sunday, 25 July 2010
Businesses that improve the energy efficiency of the commercial buildings they own will be eligible for generous tax breaks under a Gillard Labor Government.
Buildings account for 19 per cent of national energy use – with commercial buildings alone accounting for approximately 10 per cent of Australia’s emissions.
From 1 July 2011, businesses that undertake 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.
This incentive will enable businesses to claim a bonus tax deduction of 50 per cent of the cost of the eligible assets or capital works.
For example, a business that invests $1 million on assets or capital works to significantly improve the energy efficiency rating of its building, such as energy efficient lighting or air-conditioning systems, will be eligible for a bonus tax deduction of $500,000. This will reduce the company’s tax bill by around $145,000. In addition, the company will enjoy ongoing savings from lower energy costs.
The Tax Breaks for Green Buildings initiative will give Australia a head start in meeting its emissions reduction targets. The incentive will encourage the creation of thousands of new green jobs right across Australia. Some hotels and shopping centres will also be eligible.
The scheme will run until 30 June 2015. It builds on the Building Energy Efficiency Disclosure Act, promised by Federal Labor at the last election and delivered this year.
If re-elected, the Gillard Labor Government will consult closely with state governments, industry and environmental stakeholders this year on the detailed design of the incentive.
To support continued investment in green buildings before the new scheme commences, the Gillard Labor Government will also provide an additional $30 million in 2010-11 for the Green Building Fund, which provides grant funding for retrofitting buildings.
The total cost of this package is $180 million over the forward estimates, and around $1.0 billion out to 2018-19. Funding over the forward estimates has already been provided for in the Budget through the Renewable Energy Future Fund.
The initiative is part of the Government’s plan to make positive changes to how we live, work and travel.
Find out more about the Tax breaks for Green buildings policy
Tags: Environment, Gillard, Gillard Government