Overview

Greenhouse gas emissions (GHG) from construction and renovation of buildings are estimated at 5-12% of total EU emissions (EC, 2024). In several countries, local authorities levy taxes and/or fees on the execution of construction, extension, renovation, and other works, as well as for issuing the necessary permits. The tax is calculated based on the cost of construction, as well as on the floor area of the building and the nature of the development (e.g., residential, industrial), depending on the local regulations.
In Italy, Portugal, Croatia, Slovenia, and Spain with the support of the projects LOCAL4GREEN and LOCAL4GREEN PLUS (https://local4green.interreg-med.eu/) reductions between 10% and 100% have been applied by municipalities when renewable energy sources are installed as part of the construction project and/or when they are used during the execution of the works that incur the construction tax/fee, incentivising construction companies to reduce the GHG emissions.

Evidence of success

In Croatia, some municipalities adopted the incentive related to the construction tax, for instance in the Municipality of Brdovec where energy savings associated to fiscal incentive were estimated with a figure of 5.65MWh and CO2 reduction in 1.159 tCO2.

LOCATION

Quart de Poblet (ES); Dolores (ES); Pedreguer (ES); Denia (ES); Elda (ES); Rafelguaraf (ES); Brdovec (HR); Dugo Selo (HR); Jastrebarsko (HR); Klanjec (HR); Pregrada (HR); Aljezur (PT); Monchique (PT); Faro (PT); Alcoutim (PT); Portimao (PT); Olhao (PT); Lagoa (PT); Silves (PT); Alvito (PT); Cuba (PT); Portel (PT); Vidigueira (PT); Viana do Alentejo (PT); Kočevje (SL); Grosuplje (SL); Trebnje (SL); Valvasone Arzene (IT); San Casciano dei Bagni (IT)

TIMESCALE

2018-ongoing

Potential of learning or transfer

Several countries apply fees and taxes on construction works, although under different names. The replicability of this fiscal incentive is high. Despite of it, the construction and other works tax and fees are a relevant source of revenues for many municipalities. The impact on the municipal budget of any reduction of this tax has to be properly assessed and eventually offset with other taxes increases.

Contacts

For the Spanish municipalities:
Yolanda Nicolau: ynicolau@fvmp.org
Francesco Filippi: Francesco.proyectos@musol.org

For the Italian municipalities:
Borghi più belli d’Italia: project@borghipiubelliditalia.it

For the Portuguese municipalities:
Make it Better: team@makeitbetter.pt