Daniel Daly, a research fellow at the Sustainable Building Research Centre at the University of Wollongong, was recently invited to provide evidence at a public hearing on improving the energy efficiency of rental properties in Australia.
The Senate Environment and Communications committee is considering a bill – the Treasury Laws Amendment (Improving the Energy Efficiency of Rental Properties) Bill 2018 – to allow landlords to claim a tax offset for energy efficiency improvements to their rental properties. For example, currently if a hot water system breaks down a landlord is entitled to claim the cost of replacing the system with a like-for-like replacement, but not for an upgraded replacement system. This means that there is a disincentive to landlords to progressively improve the energy efficiency of their properties. The current bill is a modest trial of removing this disincentive for rental properties with a weekly rent of less than $300, and for an offset amount of $2000/yr. We recommended that both the rental threshold and offset value be increased to encourage greater uptake, and supplied expert advice on appropriate building assessment methods and energy efficiency measures. We also recommended that this bill be a first step towards more meaningful action in the private rental sector, including developing a national energy efficiency rating scheme for existing homes, requiring disclosure of a buildings energy rating at the point of sale or lease, and implementing minimum energy efficiency standards for private rentals (with support for landlords to upgrade their properties to meet these minimum standards).
The Bill has now been referred to the Senates Environment and Communications Legislation Committee for review. To become law, the bill will also need a second and third reading in the Senate and to pass a vote, before it proceeds to the Lower House for reading, debate and voting.