The age of European existing building stock and the very low growth rate make energy retrofit a critical issue at the moment. The spreading of good practices is strongly hampered by their cost effectiveness. National legislation thermal requirements for retrofitting works play a fundamental role. If they are too strict, the initial economic investment could be too high if compared with energy savings achievable. The paper refers to a case study of improving fabric thermal performance of stone masonry buildings located in Cagliari - Italy. They were built in 1950s. The economic feasibility of different energy efficiency retrofits is evaluated. Two different scenarios are analyzed: the former according to the earlier Italian legislation (valid from 2006 to 2008), the latter according to the latest and strictest measures (valid from 2010). The results show that heavy thermal performance upgrades, even though compulsory, are not completely cost-effective in a mild Mediterranean climate area as far as payback time is concerned. National subsidy policies can improve the economic return on the investment. The impact of present Italian incentives has also been evaluated. (c) 2012 Elsevier B.V. All rights reserved.