Reduced VAT rates for building renovation are key for energy efficient economies

EuroACE strongly favoured reduced VAT rates for the renovation of existing buildings and called on the European Commission to maintain this measure in its review of EU VAT legislation.

The EU has placed requirements on buildings through the Energy Performance of Buildings Directive and the Energy Efficiency Directive. Reduced VAT rates facilitate their application by stimulating labour-intensive renovation activities. Increasing renovation rates from about 1.2% to about 3% would help the EU achieve its climate objectives and bring multiple benefits: job creation, lower energy bills and reduced fuel poverty.

Closing this window of opportunity would send a disastrous signal to the industry at a time of serious economic downturn in many EU countries, where a lack of financial incentives remains a fundamental stumbling block for the renovation sector.