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Building Upgrade Finance (BUF)

Building Upgrade Finance (BUF)

Building Upgrade Finance is a finance product provided by private sector financiers and facilitated via a council administration process for environmental and heritage upgrade works to non-residential buildings.

A local council can voluntarily enter into a Building Upgrade Agreement with a building owner and a finance provider, where:

  • a building owner agrees to undertake upgrade works in respect of their building
  • a financier agrees to advance money to the building owner for the purpose of funding the upgrade works
  • a council agrees to declare a Building Upgrade Charge against the land on which the building is situated which is collected as repayments and transferred to the financier.

This process uses the existing council rates collection and finance system and the Building Upgrade Charge is recovered in a similar way to council rates. Like council rates, the Building Upgrade Charge becomes a debt on the property if unpaid.

This arrangement means that Building Upgrade Finance is secured by the property rather than the building owner. The heightened level of security allows financiers to offer attractive loan terms and provides additional benefits for building owners.

In the event of the transfer of ownership of the property, the outstanding repayments can remain with the property, if the purchaser agrees, or discharged on settlement. Also Building Upgrade Finance provides an avenue for building owners and tenants to share the costs and benefits of building upgrades. This is achieved through tenant contributions to the repayments which are possible under some existing lease arrangements, provided certain conditions are met to ensure that tenants do not incur any financial detriment.

Eligible upgrade works under Building Upgrade Finance are those that improve the energy, water or environmental efficiency or sustainability of an existing non-residential building. This includes solar photovoltaic panels, water and energy efficiency fittings, wastewater reuse systems, waste management systems and much more. Owners of non-residential State and local heritage listed buildings can also access finance for conservation works, access or building compliance improvements and works to allow ongoing use of the building.

Building Upgrade Finance was enabled through amendments to the Local Government Act 1999, and Local Government (Building Upgrade Agreements) Regulations 2017. It has been operational since 1 August 2017.

For further information, go to:

Similar schemes operate in Victoria (called Environmental Upgrade Finance) and New South Wales.

Further information from the perspective of local government can be found in'A Guide to Building Upgrade Finance for South Australian Councils' which was updated in November 2019. 


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