Deconstructing Henry - wins and missed opportunities of the Henry Tax Review
When the government announced its tax reforms recently property investors breathed a sigh of relief. The Henry Review had called for proposed changed that would have affected the way negative gearing was treated but thankfully the Rudd Government chose not to adpot the recommendation… But that doesn't mean it was all good news.
Disappointingly, the government decided to overlook propsed changes to accelerating Green depreciation.
The building sector accounts for around 23% of greenhouse gas emissions according to the Property Council of Australia. With improved technology and building design:
- new commercial buildings and their occupants could use up to 70% less energy;
- new dwellings could halve their eco foot print compared to current performances;
- retrofitted exiting commercial buildings could improve efficiency by 30-35% over the next decade
Australia currently has an oversupply of commercial property. The fastest way to increase the energy efficiency of those buildings would be to encourage landlords to retro fit these buildings with energy efficient systems.
One way to do this would be by increasing the tax incentives. But we'll have to wait and see whether this, along with other proposed reforms designed to encourage investment such as the proposal to replace stamp duty with a broader consumption-based tax, will ever see the light of day if the government wins a second term.