Building owners in South Australia now have access to an innovative way of financing environmental and energy upgrade works of recently-built structures as well as for those deemed heritage.
The mechanism, introduced by the South Australia Government, allows for upgrades that improve energy and or water efficiency, reduce emissions, or include renewable energy measures. The new Building Upgrade Finance regulations (formerly known as Environmental Upgrade Finance) took effect on 8 August 2017.
The move is set to stimulate investment and jobs in South Australia, according to the Department of Environment, Water and Natural resources, while helping to reduce emissions across the state. It’s also an Australian-first in facilitating upgrades to heritage buildings.
What’s different about the new regulations is they are designed to tackle market barriers that “often impede commercial building upgrades from going ahead”, according to the SA Government. These barriers include access to capital to fund building upgrade projects.
The aim of the new regulations is to make it easier for property owners to upgrade their existing commercial buildings to improve their environmental impact. Within the Building Upgrade Finance mechanism, a local council can voluntarily enter into a building upgrade agreement with a building owner and a financier.
Under the agreement, the building owner agrees to undertake the upgrade to the building, the financier agrees to advance money to the building owner to fund the upgrade, and the council agrees to levy a building upgrade charge against the land on which the building stands. The charge is paid by the building owner to recoup the money advanced by the financier for the upgrade works and is passed on to the financier by the council once it’s received from the building owner. The loan is effectively tied to the property rather than the property owner and can be transferred if the asset is sold.
Image:Adelaide's Mayfair Hotel was built in the 1930s. Source: Modern Heritage Matters
#buildings #upgrades #heritage #environmental #energy #water #renewable #regulations #finance