Over the last decades, the growth of urban centres has led a new phase in world development that focuses on the enlargement of densely populated areas known as megalopolises. It has generated a debate on the renewal of built heritage, especially in Europe. The rebirth of cities, which until yesterday was an exceptional phenomenon thought to be uncontrollable, has now been reconsidered due to the Covid-19 pandemic. It brings with it an even more significant theme, i.e. sustainability in its broadest meaning and the quality of life and resilience of the places we inhabit.

After the 1973 oil crisis, in Europe as in most of the Western world, it became clear that progress and sustainable development had to be inseparable in order to balance an ecosystem heavily tried by all the anthropic activities that are ever more threatening to the survival of humankind itself on this planet.

Therefore, all the European states have clarified how one of the fundamental driving forces guiding this phase is precisely urban regeneration alongside social-economic policies aiming to support this equally necessary and crucial change.

The different incentives put in place by European countries, even if within different national frameworks, aim to support this rebirth firmly, considering it to be fundamental for the following two aspects: livability and the quality of cities bring human capital with them. Human and business capital generate value, which is then reinvested in the same place of origin.

It is essential to clarify that the impact of urban regeneration projects exceeds the mere energy efficiency of the buildings, as this only touches on technical matters regarding saving and at times producing energy. It certainly does not investigate the social and economic sustainability which is strictly linked to environmental and spatial quality which may only be restored or redesigned through great urban renewal projects.

In this sense the regulations adopted by the United Kingdom in the so-called “Enterprise Zones”, added to incentives for “Land Remediation Relief” (LRR), are the best examples of winning policies geared towards the renovation of decommissioned or degraded industrial areas. This is achieved through less strict urban regulations aiming to promote new productive activities and create employment.

The so called “Enhanced Capital Allowances” (ECA- introduced in 2012 over an eight-year period ending 31 March 2020) allow for a deduction of 100% of expenditure on new plants and machinery, aimed at saving energy and producing environmental benefits for taxable persons for income tax purposes. Through “Land Remediation Relief”, companies can deduct up to 150% of expenditures sustained to remediate contaminated land. This deduction is applied to capex (“capital expenditure”) and costs charged to income statements (opex).

As mentioned above, these different regulations are explicitly intended to create investments on national territory, and if in the aforementioned cases, being able to accede to these concessions, necessitates being inhabitantsof the U.K subject to income tax , in Germany regulations (within certain limits) allow for a tax deferral in order to avoid immediate taxation of latent capital gains (stille Reserven) which emerge when selling certain fixed assets (i.e. buildings) and reinvesting profits in other fixed assets (i.e. buildings) as long as this new investment takes place within specific time limits.

The amount of latent capital gains (stille Reserven) is deducted from the cost of acquisition or production/construction of the building (or other asset) to be invested in. However, although such latent capital gains are not definitely removed from taxation as they will be taxed when the building (or other asset) invested in is sold, and although deduction of the cost of acquisition/production/construction of these latent capital gains will entail lower depreciation and, when selling, a lower cost when calculating capital gain, this regulation encourages an increase in investments, which have a cascading effect on the entire supply chain.

Moreover, in Spain there is a series of incentives for urban regeneration that stem from state regulations belonging to autonomous and local communities. Among these, for example, is the possibility for tax authorities to grant a 50% to 90% reduction on local property tax (like IMU in Italy) in favour of buildings that are the object of recovery interventions by companies who aim to carry out urbanization and development interventions. These concessions are recognized for the fiscal years in which recovery work on the building is in progress, up to the period after completion, and cannot exceed three tax periods.

Spanish regulations regarding taxation at a local level allow tax authorities themselves to distribute tax benefits, to be regulated in detail, concerning constructions declared to be of particular use on a municipal level, of historical and artistic value or which promote employment, investment in infrastructures or social housing.

The set of European regulations referring to medium- (2030) and long-term (2050) goals on climate, and referring to incentives towards renewable energy and energy efficiency represent a clear set of strategies, primarily by means of urban investment support (URBIS).

A detailed discussion of the sets of regulations adopted by different countries could regard support for better energy-saving performance in buildings. These run from a reduction of VAT rates (5% instead of the normal 20% rate) on the installment of energy-saving materials in residential buildings, such as insulating materials or materials that limit heat loss, as well as central heating renovation in both Spain and France (5.5% ref.CITE- Crédit d’Impôt pour la Transition Energétique), to a 19% tax credit (FYTC- First Year Tax Credit) connected to expenditures for the realisation of energy-saving plants in the United Kingdom or an annual 18% tax reduction to substitute plant fixtures in buildings (PMA Plant and Machinery Allowance) or an added 3% deduction on costs incurred in the construction of new commercial buildings or renovation of existing buildings (SBA Structures and Buildings Allowance). The objective would be to create a corpus of rules and implementation tools which, from observing the positive benefits in other countries, could be replicated and systematised in Italy .

The whole set of regulations already partially affecting some building categories will have to extend these eco-incentives to all other building types, thereby attracting a growing amount of capital for projects of greater dimensions (i.e. mobility and hospital infrastructures) and having a stronger impact towards pollution reduction, helping the construction and plant supply chain and generally giving more certainties regarding authorisation and administrative process times. Only by following this path will both institutional and foreign investments be able to mobilise the necessary financial and professional resources as well as large capital flows needed to carry out said interventions. This not only to benefit state coffers but the whole community, without forgetting that the realestate industry, which can generate up to 20% of gross domestic product in Italy, has historically made a fundamental contribution to the economic growth of our country.