Property tax extemption for rehabilitated residential buildings in RomaniaOctober 5, 2011 at 7:06 pm | Posted in Legislative Outreach | 2 Comments
Tags: Energy Efficiency, fiscal incentives, Green Building, law, Legislation, local policies
Starting with July 2011, a new law that approves the famous 18/2009 GO regarding the thermal rehabilitation of blocks of flats, introduces the property tax exemption for owners who rehabilitate their buildings. The exemption period is of minimum 7 years and is applicable only if the owner covered the expenses of rehabilitation (her)/himself and only if he/she obtained an energy audit before the rehabilitation and can prove that the auditor’s recomendations were implemented.
The measure is very welcomed, but RoGBC hopes that this is just the beginning of further similar measures that address also the commercial/office sector of the market as well . It is well known that the property taxes for residential houses/apartments are very low and can’t motivate alone a decision for rehabilitation. So if the national/local government’s strategy with this measure is to motivate building owners to improve the quality of their buildings and reduce energy consumption, the big building owners should be targeted as well.
In a research made by RoGBC on Local Measures to Attract Investments in Green Buildings we identified the most effective local measures that could motivate developers to build green and/or renovate existing buildings at green standards. When it comes for financial measures, the property tax reduction and a discount of the building permit fee were on top of the list.
Local public authorities have the possibility to create such tools since according to the Fiscal Code they can establish the level of property tax somewhere between 0.5 -1.5% per year from the value of the building. Asking for tax reductions and exemptions in a challenged economic period might look too courageous, some may say…..not also if you consider the increased value of the building if it obtains a voluntary environmental certification or at least an A in the Energy Performance Certificate ( EPC’s are mandatory anyway). Building green does not mean only energy efficiency, but for now this is the best regulated area by mandatory laws.
There are also the other benefits that come with building green such as higher level of productivity of the employees, reduced sickness days, higher retention rate, better comfort etc…not to leave aside the potential for creating new jobs and stimulating the local economy since a lot of services and solutions have to be sourced locally.
What do you think?