Tax incentives can be used to steer investment in energy-efficiency measures. The reduction of VAT or tax deductions on renovation activities, mainly on labour costs, has often created win-win-situations for the environment, economic growth, and created/assured workplaces.
Luxembourg has introduced a reduced tax of 3 per cent on all construction and renovation of housing, provided the property is intended as a main residence. The total amount of the VAT benefit cannot exceed EUR 50,000 per built and/or renovated residence. In Sweden, the system is called “ROT-avdrag” (repairs, conversion, and extension – deduction). Repair, maintenance, conversions and extensions are counted as ROT work, and are tax deductible up to 50,000 Swedish croons (approximately EUR 5,000) per person per household per year.
 Guichet.lu, “Applying for VAT rebate or direct application of the super-reduced tax rate”. Available at https://guichet.public.lu/en/citoyens/logement/construction/aides-indirectes/remboursement-tva-taux-reduit.html (accessed on 10 October2020).
 Skatteverket, “ROT and RUT work”. Available at https://www.skatteverket.se/servicelankar/otherlanguages/inenglish/businessesandemployers/declaringtaxesbusinesses/rotandrutwork.4.8dcbbe4142d38302d793f.html (accessed on 10 October 2020).