On 20 April 2011, the Government announced that it will delay proposed tax breaks for environmentally friendly improvements to green buildings.  The proposed scheme will now commence on 1 July 2012, 12 months later than originally proposed.  The Government has indicated that it requires further time to consult with the industry. 

Exposure draft legislation is now expected to be released later in 2011, and the Government intends to introduce legislation towards the end of the year in order to give potential participants ample time to make submissions.

The announcement follows the Government’s release of a consultation paper in January of this year that detailed the workings of the proposed one billion dollar scheme.   This consultation paper provided that the tax break will be made available for investments in eligible assets or capital works to improve energy efficiency of existing buildings whose NABERS rating is consequently raised from 2 stars or lower to 4 stars or higher.  The tax break is proposed to be in the form of a one-off bonus tax deduction of 50% of the cost of improvements. 

Initial submissions received by the Government from industry groups supported the proposed tax break but made a number of suggestions that could lead to an improved scheme.  The most prominent suggestions included:

• Making the tax break available as a refundable tax offset as well as the current proposal of a one-off 50% bonus deduction;
• Extending the tax break so that it applies to improvements to buildings that already have a NABERS rating of 2 stars or above in limited circumstances;
• Including tailored rules for hotel fit-outs.

The numerous suggestions received in the first round of consultations appear to have been the catalyst for the delay of the scheme.

If you would like further information in respect of the Tax Breaks For Green Buildings Scheme, feel free to contact your Moore Stephens advisor.

Authors:
Stephen O’Flynn, Director, Moore Stephens Melbourne
Nick Zanikos, Senior Manager, Moore Stephens Melbourne


Contact

Stephen O’Flynn
T  +61 03 8635 1800
soflynn@moorestephens.com.au

www.moorestephens.com.au