Carbon Tax System - will it influence the property market?

The combined energy crisis and looming carbon tax system, might influence the way property investors build on their property portfolios.

A recent study conducted by Investment Property Databank (IPD) and the Green Building Council of South Africa (GBCSA) concluded that energy efficient (EE) buildings deliver better financial returns than non-EE buildings. The proposed 2016 carbon tax system also falls in line with the assessment as EE becomes an important investment decision for property and business owners.

During the study 461 commercial buildings were investigated and found that the top quartile EE properties delivered a 15.9% total return. That is a 170 basis points higher than the remainder of the buildings, which delivered a total return of 14.2%.

In existing buildings, changes to how the property is managed might increase the EE margin of the property. The three main components which will make a building more energy efficient are lighting, climate control, and operational equipment such as IT and data processing. These are small changes but over time it will not only increase the building’s EE but also have a positive impact on the owner and business’ bottom line.

The longer an owner waits to implement these changes, the greater the risks of potential financial losses becomes and with the looming carbon tax system it becomes even greater.
Therefore buildings with an holistic EE strategy in place are going to become more attractive to property investors in the long run.

Going green will no longer just be good for the environment but will also be good for your property portfolio.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us