Fiscal instruments in sustainable housing policies in the EU and the accession countries

Abstract

AbstractAlthough progressive government guidelines and knowledge about sustainable housing exist, progress in implementing them in practice has been slow. The perceived costs and the lack of market demand have been identified as the main barriers. A choice of fiscal instruments is essential in sustainable housing policies. This article presents an analysis of economic measures currently used to support sustainable housing in the EU and the accession countries, indicating the areas where policy instruments are either focused or lacking. Based on the country progress reports of the Third European Ministers Conference on Sustainable Housing in Belgium in 2002, the results indicate that environmental taxes and subsidies are used in the EU and the accession countries, but that they have had a low impact on the housing sector. An examination of the developments since 1996 shows that apart from energy initiatives resulting from the Kyoto Protocol, the lack of a strong driving force has kept progress slow. Conclusions are based on the analysis findings – the low impact of taxation on housing, the lack of environmental criteria in the reduced VAT rate and the narrow focus of subsidies. This article argues that enlargement of the EU presents opportunities for sustainable housing in Europe, if the fiscal instruments are enforced by legal means. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment.