Tax Laws Amendment (Clean Building Managed Investment Trust) Act 2012

Administered by Department of the Treasury

Legislation au C2012A00185 In force Act

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No. 185, 2012

An Act to amend the law relating to taxation, and for related purposes

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Clean building managed investment trusts

Income Tax Assessment Act 1997

Income Tax (Managed Investment Trust Withholding Tax) Act 2008

Taxation Administration Act 1953

Tax Laws Amendment (Clean Building Managed Investment Trust) Act 2012

No. 185, 2012

An Act to amend the law relating to taxation, and for related purposes

[Assented to 10 December 2012]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax Laws Amendment (Clean Building Managed Investment Trust) Act 2012.

2 Commencement

This Act commences on the day this Act receives the Royal Assent.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Clean building managed investment trusts

Income Tax Assessment Act 1997

1 Subsection 995‑1(1)

Insert:

clean building has the meaning given by section 12‑430 in Schedule 1 to the Taxation Administration Act 1953.

2 Subsection 995‑1(1)

Insert:

clean building managed investment trust has the meaning given by section 12‑425 in Schedule 1 to the Taxation Administration Act 1953.

Income Tax (Managed Investment Trust Withholding Tax) Act 2008

3 After section 2

Insert:

2A Definitions

In this Act:

clean building managed investment trust has the same meaning as in the Income Tax Assessment Act 1997.

entity has the same meaning as in the Income Tax Assessment Act 1997.

fund payment has the same meaning as in the Income Tax Assessment Act 1997.

income year has the same meaning as in the Income Tax Assessment Act 1997.

information exchange country has the same meaning as in the Income Tax Assessment Act 1997.

4 Paragraph 4(1)(a)

Omit “fund payments” (wherever occurring), substitute “fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust)”.

5 At the end of paragraph 4(1)(a)

Add:

(iv) 10% for fund payments to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust in relation to the income years starting on or after 1 July 2012; or

6 Subsection 4(2)

Repeal the subsection.

Taxation Administration Act 1953

7 Section 12‑375 in Schedule 1 (fourth paragraph)

Omit “is located”, substitute “is located and whether the trust is a clean building managed investment trust”.

8 At the end of section 12‑375 in Schedule 1

Add:

A managed investment trust is a clean building managed investment trust if it is a managed investment trust that holds one or more clean buildings and does not derive assessable income from any other taxable Australian property (other than certain assets that are reasonably incidental to a clean building).

9 Subparagraph 12‑385(3)(a)(i) in Schedule 1

Omit “*fund payments”, substitute “*fund payments (except to the extent that they are, or are attributable to, fund payments from a *clean building managed investment trust)”.

10 Subparagraphs 12‑385(3)(a)(ii), (iii) and (iv) in Schedule 1

11 At the end of paragraph 12‑385(3)(a) in Schedule 1

Add:

(v) 10% for fund payments to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust in relation to the income years starting on or after 1 July 2012; or

12 Subparagraph 12‑390(3)(a)(i) in Schedule 1

Omit “*fund payments”, substitute “*fund payments (except to the extent that they are, or are attributable to, fund payments from a *clean building managed investment trust)”.

13 Subparagraphs 12‑390(3)(a)(ii), (iii) and (iv) in Schedule 1

14 At the end of paragraph 12‑390(3)(a) in Schedule 1

Add:

15 Subparagraph 12‑390(6)(a)(i) in Schedule 1

Omit “*fund payments”, substitute “*fund payments (except to the extent that they are, or are attributable to, fund payments from a clean building managed investment trust)”.

16 Subparagraphs 12‑390(6)(a)(ii), (iii) and (iv) in Schedule 1

17 At the end of paragraph 12‑390(6)(a) in Schedule 1

Insert:

18 After paragraph 12‑395(3)(a) in Schedule 1

Insert:

(aa) must specify the extent (if any) to which the payment is, or is attributable to, a *fund payment from a *clean building managed investment trust; and

19 After paragraph 12‑395(6)(a) in Schedule 1

Insert:

(aa) must specify the extent (if any) to which the payment is, or is attributable to, a *fund payment from a *clean building managed investment trust; and

20 At the end of Subdivision 12‑H in Schedule 1

Add:

12‑425 Meaning of clean building managed investment trust

(1) A trust is a clean building managed investment trust in relation to an income year if during the income year:

(a) it is a *managed investment trust in relation to the income year; and

(b) it holds one or more *clean buildings (including the land on which the buildings are situated); and

(c) it does not derive assessable income from any *taxable Australian property (other than from the clean buildings or assets that are reasonably incidental to those buildings).

5% safe harbour for certain income reasonably incidental to a clean building

(2) A trust is not a *clean building managed investment trust in relation to an income year if the assessable income of the trust that is derived from assets that are reasonably incidental to *clean buildings is greater than 5% of the assessable income of the trust that is derived from clean buildings.

(3) The regulations may specify kinds of assets that are, or are not, reasonably incidental to *clean buildings for the purposes of this section.

12‑430 Meaning of clean building

(1) A building is a clean building if:

(a) the construction of the building commenced on or after 1 July 2012; and

(b) it satisfies the requirements in subsections (3) and (4).

(2) For the purpose of subsection (1):

(a) the construction of the building is taken to have commenced at the time the works on the lowest level (including any basement level) of the building commence; and

(b) the construction of the building is not taken to have commenced merely because works preparing the site for construction, or works undertaken below the lowest level of the building (including any basement level), have commenced.

(3) A building satisfies the requirements in this subsection if:

(a) the building is a commercial building that is any of the following (or is a combination of any of the following):

(i) an office building;

(ii) a hotel for use wholly or mainly to provide short‑term accommodation for travellers;

(iii) a shopping centre; or

(b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph.

(4) A building satisfies the requirements in this subsection if:

(a) the building:

(i) has, and continues to maintain at all times during the income year, at least a 5 Star Green Star rating as certified by the Green Building Council of Australia; or

(ii) has, and continues to maintain at all times during the income year, at least a 5.5 star energy rating as accredited by the National Australian Built Environment Rating System (NABERS); or

(b) the building satisfies the requirements prescribed by the regulations for the purposes of this paragraph.

(5) For the purposes of subsection (4), if:

(a) a building has previously satisfied the requirements in that subsection; and

(b) the building then fails to satisfy the requirements for a period (the non‑compliance period); and

treat the building as having satisfied the requirements during the non‑compliance period.

[Minister’s second reading speech made in—

House of Representatives on 10 October 2012

Senate on 31 October 2012]

(180/12)

Overview

The Tax Laws Amendment (Clean Building Managed Investment Trust) Act 2012, enacted by the Parliament of Australia, amends various tax laws to introduce specific tax treatment for clean building managed investment trusts (clean MITs). The Act aims to address the need for a distinct tax framework to support investment in environmentally sustainable commercial buildings, thereby encouraging economic growth in the green building sector. The policy objective is to incentivise investment in clean buildings by offering tax benefits to trusts that invest exclusively in these properties and meet specific sustainability criteria. The Act ensures that clean MITs are recognised as a separate category in tax law, thereby allowing for tailored tax treatments that distinguish them from other types of managed investment trusts. The Act amends the Income Tax Assessment Act 1997, the Income Tax (Managed Investment Trust Withholding Tax) Act 2008, and the Taxation Administration Act 1953 to incorporate definitions and provisions for clean buildings and clean MITs. It introduces a 10% withholding tax rate for fund payments from clean MITs for income years starting on or after 1 July 2012. The Act also modifies the criteria for fund payments and includes specific provisions for clean MITs in the withholding tax regime, ensuring that these trusts are appropriately recognised and regulated under the tax laws.

Scope and Application

The Tax Laws Amendment (Clean Building Managed Investment Trust) Act 2012 applies to certain managed investment trusts that hold commercial buildings meeting specific sustainability criteria, referred to as "clean buildings." The Act primarily amends the Income Tax Assessment Act 1997, the Income Tax (Managed Investment Trust Withholding Tax) Act 2008, and the Taxation Administration Act 1953 to provide tax incentives for investments in these environmentally sustainable commercial properties. The Act applies to entities that hold clean buildings and operate as managed investment trusts, provided they do not derive assessable income from other taxable Australian property beyond what is reasonably incidental to the clean buildings. The Act's provisions are effective nationally, impacting all jurisdictions within Australia. The Act does not explicitly state any exclusions or thresholds but allows for regulation to specify types of assets that are incidental to clean buildings. The Act may extend or restrict its application through subordinate instruments, which would be detailed in regulations made under the authority of the Act.

Key Provisions

The Tax Laws Amendment (Clean Building Managed Investment Trust) Act 2012 makes significant amendments to existing tax laws to create a favourable tax regime for clean building managed investment trusts (CBMITS). Section 1 of the Act provides that the legislation may be cited as the Tax Laws Amendment (Clean Building Managed Investment Trust) Act 2012, while section 2 stipulates that the Act commences on the day it receives Royal Assent. The substantive changes to the law are set out in Schedule 1, which amends the Income Tax Assessment Act 1997, the Income Tax (Managed Investment Trust Withholding Tax) Act 2008, and the Taxation Administration Act 1953. The Act imposes various obligations on entities that seek to benefit from the new tax regime for CBMITS. Firstly, to qualify as a CBMITS, a trust must be a managed investment trust that holds one or more clean buildings and must not derive assessable income from any other taxable Australian property (other than certain assets reasonably incidental to a clean building). The trust must also ensure that its assessable income from assets reasonably incidental to clean buildings does not exceed 5% of its assessable income from clean buildings. Additionally, the Act mandates that any fund payments made by a CBMITS must specify the extent to which the payment is, or is attributable to, a fund payment from a CBMITS. There are no specific offences or penalties mentioned within the text of the Act itself for breach of the provisions. However, the Act is part of the broader tax law framework, which includes general penalties and enforcement mechanisms. Under the Income Tax Assessment Act 1997, penalties can be imposed for non-compliance or evasion, which may include fines and imprisonment. For example, section 285 of the Income Tax Assessment Act 1997 provides for penalties, including fines of up to $22,200 for individuals and $111,000 for other entities, for making a false or misleading statement or document. In more serious cases, section 287 may impose penalties of up to five times the amount of tax avoided, or imprisonment for up to five years, or both, for attempting to defeat or evade tax. The Act also allows for the recovery of tax by the Commissioner of Taxation through the general law, which could result in civil litigation for non-compliance.

Area of Law: Taxation Law
Instrument: Act
Concepts: Definitions & Interpretation; Repeal & Amendment; Reporting & Disclosure Obligations; Compliance Obligations; Regulatory Standards

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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