Strategies for the federal government to improve strata sustainability

Most strata sustainability programs have come from the state or local council grassroots level. What can the federal government do to stimulate the electrification of strata buildings....

​Decarbonising apartment buildings is significantly more complex than detached housing due to the split incentive problem: landlords often pay for upgrades while tenants reap the energy savings, or owners corporations struggle to reach a consensus on shared capital expenditure. 

To address this at a federal level, the Australian Government can move beyond simple rebates and focus on structural, financial, and regulatory shifts.

1. Financial Incentives & Tax Reform
The federal government has the unique power to alter the financial attractiveness of these upgrades through the tax system.

• Accelerated Depreciation: Allow landlords to instantly write off the cost of installing heat pumps, induction cooktops, or EV chargers in rental apartments.
• Green Loans for Strata: Expand the Clean Energy Finance Corporation (CEFC) to provide low-interest, long-term strata loans. These would allow Owners Corporations (OCs) to borrow for solar and batteries with much more attractive interest rates than are currently afforded to strata via unsecured lending. This was trialled with Brighte in the ACT in conjunction with a solar for apartments program and CEFC has work in progress with Lannock Strata finance in NSW. However, the strata loans need to be made more accessible and from a number of providers across all states and territories.
• Fringe Benefits Tax (FBT) Exemptions: Extend FBT exemptions (similar to those for electric vehicles) to include the installation of home EV charging infrastructure in multi-unit dwellings. 

2. Regulatory Alignment & National Standards
While building codes are often state-based, the Federal Government leads the National Construction Code (NCC). 

• Mandatory Minimum Standards: Update the NCC to require all existing buildings undergoing significant renovations to meet "EV-ready" standards (e.g., ensuring the switchboard can handle the load).
• Uniform Right to Charge: Create a federal framework that prevents Owners Corporations from unreasonably refusing an owner’s request to install an EV charger or solar connection, harmonising the currently fragmented state laws.
• Solar Sharing Standards: Incentivise the rollout of shared solar for apartments (e.g. Allume Energy Solar Sharing). Germany uses a tenant electricity surcharge where landlords receive a statutory bonus for selling rooftop solar power directly to their tenants at a rate lower than the grid. 
• Revisit "embedded networks" market regulation to protect consumers while encouraging investment. Can embedded network regulation be simplified to allow smaller strata schemes (e.g. under 60 lots) to retrofit embedded networks with billing and administration providers who are NOT also selling energy to the lot owners/common areas creating a conflict of interest? An article on recent embedded network updates in NSW is here. 
• Remove Red tape to allow Balcony Solar systems. Following over 1 million of these portable balcony solar systems being installed in Germany and rollout across Europe, Utah (U.S.) etc Australia should enact the legislation and regulations to make this easy. It will help renters access renewable energy for the first time. A podcast on the SwitchedON podcast on Balcony Solar is here. An article on Renew Economy is here.

3. Targeted Grant Programs
The $1.7 billion Energy Upgrades for Australian Homes package is a start, but it could be expanded specifically for high-density living rather than it's initial target of low income/social housing upgrades. 

• Electrification Concierge Services: Fund a national Strata Energy Advisor program. Most Owners Corporations fail to electrify because the technical complexity is too high; a federal grant could pay for the initial feasibility audits and engineering reports.
• The Gas-Free Bonus: Provide direct federal subsidies for the decommissioning of central gas hot water systems in favor of commercial-grade communal heat pumps. This needs to be coupled with resources to help Owners Corporation navigate disconnection from gas distribution monopolies where present (e.g. Jemena). Saul Griffith's Rewiring Australia estimates that there is a $7bn barrier to getting off gas at the present time. 

4. Addressing the Split Incentive
To get landlords to care about induction cooktops and insulation:

• Star Ratings for Rentals: Implement a mandatory federal energy efficiency disclosure scheme for all rental properties (e.g. using NatHERS). If a landlord can’t lease a 1-star apartment, they are incentivised to upgrade to 3-stars to attract tenants. The UK has a "no rating, no rent" policy.
• Modernisation Surcharges on Rent. German tenancy law allows landlords to increase annual rent by a percentage of the costs incurred for energy-efficiency modernisations. This gives landlords a direct path to recover capital spent on heat pumps or insulation, provided the tenant's energy bills are expected to drop.
• Solar for Renters: Offer a federal tax credit to landlords who install solar and batteries and pass a portion of those savings on to the tenant.

Technology	Primary Value Lever	Outcome
Solar/batteries	CEFC Strata loans ​(which are NOT unsecured loans. Can capital works fund balances be used as security?)	Removes the "upfront cost" barrier for Owners Corporations. Offset the federal battery rebate "ratchet back for larger batteries" which penalises strata which needs larger batteries (<50kWh)
EV Charging	NCC requirements	Prevents future "retrofitting nightmares" by ensuring capacity.
Heat Pumps	Gas Phase Out Grants	Lowers the massive cost of replacing central gas boilers.
Induction cooktops	Instant Asset Write off	Encourages landlords to swap gas cooktops during tenancies.

While some states have led the way with targeted grants, most current incentives are designed for detached, owner-occupied homes. Below is a summary of the existing landscape in key states and where federal gaps remain most prominent.

State	Solar & Batteries	Heating & Cooking	EV Charging
NSW	Solar for Apartment Residents: Grants up to $150,000 (covering up to 50%) for shared solar.  NSW Peak Demand Reduction Scheme: Rebates up to $2,400 for VPP-capable batteries.	Energy Savings Scheme (ESS): Discounts for upgrading to heat pump hot water and air conditioning. August 2025 saw a reduction in rebates for multiple heat pumps which penalises strata.	EV Ready Buildings: Previously funded strata upgrades (up to $80k), but program closed in late 2023.
VIC	Solar for Apartments:  Rebates of up to $2,800 per apartment for shared solar systems or all townhouses installing individual solar systems at the same time. Solar for Rentals: Rebates up to $1,400 plus interest-free loans for landlords.	Victorian Energy Upgrades (VEU): Subsidies for heat pumps and approximately $140 for induction cooktops.	Limited to a $100 registration discount for EV owners; no specific strata charging grants.
ACT	Sustainable Household Scheme: 0% interest loans up to $15k for solar, batteries, heat pumps, and EVs.	Rebates up to $2,500 for low-income households for heat pumps.​	Loans cover the cost of EV chargers for residents.
NT	Solar for Multi-Dwellings: Grants specifically for shared solar on apartment buildings.	No specific induction or heat pump programs identified.	Registration and stamp duty concessions only.

Prominent Federal Gaps
Despite these state efforts, several critical "valleys of death" exist where federal intervention is needed to achieve national scale: 

• Lack of Common Property Financing: Most state rebates (like VIC's Solar for Rentals) target individual units. There is a massive gap for Owners Corporations to fund building-wide upgrades (e.g., central heat pumps or large-scale batteries) because they cannot easily access consumer-style low-interest loans. Rewiring Australia has called for a HECS style loan system for solar energy secured against the property rather than the owner.
• The Rental Induction Barrier: While Victoria offers a small $140 rebate for induction, it doesn't cover the high cost of electrical work (upgrading circuits). Federal Instant Asset Write-offs would be a more powerful tool for landlords than small, state-based rebates.
• EV Retrofitting Standards: NSW's strata EV grant was highly successful but has closed ($10m funding). No national mandate or ongoing funding exists to ensure existing apartment switchboards are "EV-ready," creating a future bottleneck as EV adoption grows. ARENA has funded $1.6m for Nox Energy to provide a trial of 2,000 low power QR code activated power outlets for EV charging in strata. Case study is here. This should be expanded to an industry wide subsidy program across multiple vendors.
• Mandatory Disclosure: There is currently no national requirement to disclose the energy efficiency of an apartment at the point of lease or sale (similar to the mandatory star ratings in the ACT). Without this, landlords have no market incentive to invest in electrification.

Contributor
Brent Clark
CEO and Founder, Wattblock