Bridging policy and prices: Causal evidence of housing renovation subsidies on property values in Italy

This paper investigates the impact of a government renovation subsidy program on housing prices, with a focus on the Italian region of Piemonte. We exploit a spatial discontinuity in the eligibility criteria for a tax credit targeting anti-seismic renovations and employ a difference-in-differences methodology to assess the policy’s effects. Our findings show that prices of apartments eligible for the subsidy increased by 3.2 percent more compared to those of ineligible properties. This increase rises to 11.2 percent when considering only single-family detached homes.