As yet, there is still very little ‘greening’ of the tax system at the local level. This is surprising, because the overall extent of local taxation is on the rise and local government today has major responsibilities in implementing national environmental policy. Property valuation, in particular, offers perspectives for supporting the policy target of more sustainable construction and renovation of private dwellings. In this study, commissioned by SenterNovem, the key question addressed is whether reducing the property tax in proportion to a building’s energy performance is feasible in legal terms, i.e. whether relevant Dutch legislation (Municipalities Act, Property Valuation Act) provide local authorities the power to take such fiscal action.