The Circular Economy (CE) has emerged as an economic paradigm that could provide a pathway to sustainable development. The transition to a CE is a complex process requiring wide multi-level and multi-stakeholder engagement, which can be facilitated by appropriate policy interventions. As value retention processes in the CE require additional labour, the transition from a linear to a circular economy can be viewed as a transition from a capital-based economy to a labour economy. Consequently, a ‘circular tax shift’, based on an introduction of environmental taxation paired with a reduction of labour taxation, could be a powerful lever for public policy. The aim of this research was to assess the effect of this tax shift on the financial feasibility of circularity in the construction sector. The main research question is: ‘What is the effect of a circular tax shift on the financial feasibility of circular construction, in relation to linear construction?’ To answer this question, a micro-economic analysis has been applied on two circular construction case studies: the ‘The Voice of Urban Nature’ and ‘Circuloco’ pavilions that were built at the Floriade World Expo 2022. A linear and circular variant have been developed for both case studies, for which a life cycle costing analysis has been conducted. A life cycle assessment has been applied to determine the environmental impacts, on the basis of which environmental taxation was applied under the taxation scenarios, which reflected varying levels of the circular tax shift. The results show that under the current taxation system, the total life cycle costs for the circular variants are 2,0 - 2,7% higher than for the linear variants, though environmental impacts are lower by 38,7 - 52,7%. The effect of the tax shift is that the cost differences between the linear and circular variants decrease, and in two of the high level tax shift scenarios, the circular variant of the Circuloco pavilion becomes more financially feasible than the linear variant. Although the external validity is low, the results of the research imply that the suggested circular tax shift could create incentives to use secondary and biobased materials in construction. The tax circular shift also implies many other effects, which are outside the scope of this research, but have been suggested as subjects for follow-up research.