The Preferential Income Tax Treatment of Owner-occupied Housing PDF Download
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Author: James R. Follain
Publisher:
ISBN:
Category : Home ownership
Languages : en
Pages : 32
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Book Description
Author: James R. Follain
Publisher:
ISBN:
Category : Home ownership
Languages : en
Pages : 32
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Book Description
Author: Krister Andersson
Publisher: International Monetary Fund
ISBN: 1451948808
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
It is well known that the preferential tax treatment of housing induces an inefficient allocation of saving and investment. This paper analyzes, in a portfolio framework, how eliminating the deductibility of mortgage interest payments for federal income tax purposes might affect investment in housing. Expected rate of return and risk is estimated for three assets, bonds, housing, and stocks. The possibility that assets are imperfect substitutes is explicitly recognized in one section of the paper. The model suggests that the share of housing is likely to decrease by 4 to 9 percentage points if mortgage interest payments are not deductible. This may call for careful phasing of the change in policy.
Author: Makoto Nakajima
Publisher:
ISBN:
Category : Real property tax
Languages : en
Pages : 42
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Book Description
This paper quantitatively investigates the optimal capital income taxation in the general equilibrium overlapping generations model, which incorporates characteristics of housing and the U.S. preferential tax treatment for owner-occupied housing. Housing tax policy is found to have a substantial effect on how capital income should be taxed. Given the U.S. preferential tax treatment for owner-occupied housing, the optimal capital income tax rate is close to zero, contrary to the high optimal capital income tax rate implied by models without housing. A lower capital income tax rate implies a narrowed tax wedge between housing and non-housing capital, which indirectly nullifies the subsidies (taxes) for homeowners (renters) and corrects the over-investment to housing.
Author: Paul Edward Merz
Publisher:
ISBN:
Category : Housing
Languages : en
Pages : 174
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Book Description
Author: Patric H. Hendershott
Publisher:
ISBN:
Category : Capital levy
Languages : en
Pages : 42
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Book Description
Owner-occupied housing is said to be favored in the tax code because mortgage interest and property taxes can be deducted in the computation of one's income tax base in spite of the fact that the returns from owner- occupied housing = not taxed. The special tax treatment reduces the user cost of capital for owner-occupied homing. The issue treated in this paper is the measurement of the tax rate to be employed in the user cost calculations. It is argued that different tax rates am appropriate for the tenure choice and quantity-demanded decisions, and that these values depend on the detailed tax position of the household and the method of finance. Average 1977 tax rates for households in different income ranges are calculated using the NBER TAXSIM microeconomic data file on individual tax returns.
Author: Michael Ball
Publisher:
ISBN:
Category : Home ownership
Languages : en
Pages : 60
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Book Description
Author: James M. Poterba
Publisher:
ISBN:
Category : Housing
Languages : en
Pages : 64
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Book Description
The mortgage interest deduction, the property tax deduction, the unique treatment of capital gains on owner-occupied homes, and the absence of taxation on imputed rent from owner-occupied homes all influence the effective cost of housing services. They also affect federal income tax revenues and the distribution of income tax liabilities. We draw on household-level data from the 2004 Survey of Consumer Finances to analyze how several potential reforms would affect incentives for housing consumption as well as the distribution of income tax burdens. Our analysis recognizes that changing the mortgage interest deduction would induce changes in household financial behavior. We estimate that repealing the mortgage interest deduction in 2003 would have raised income tax revenues by $72.4 billion in the absence of any portfolio adjustments, but by only $61.9 billion if homeowners responded by drawing down a limited set of financial assets to partially replace their mortgage debt. The revenue effects of changing the property tax deduction similarly depend on how state and local governments alter their mix of revenue instruments in response to federal tax reform. Our results underscore the importance of recognizing behavioral responses when calculating the revenue costs of income tax provisions relating to owner-occupied housing.
Author: Frank De Leeuw
Publisher:
ISBN:
Category : Housing
Languages : en
Pages : 32
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Book Description
Author: Ronald John Sepanik
Publisher:
ISBN:
Category : Home ownership
Languages : en
Pages : 444
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Book Description
Author: Jonathan M. Barrett
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The maxim “my house is my castle” encapsulates what may be described as “the Castle Doctrine”, which views an owner-occupier's house as a unique type of property worthy of special policy and legal consideration. Legislative privileging of the owner-occupied house is manifest, inter alia, in national and local taxation. However, rather than the house, it is the home, principally a psychological concept, which might warrant policymakers' and legislators' attention because of its presumed contribution to human wellbeing. In this scheme, ownership of the occupied property is a secondary consideration so that, to the extent practicable, owner-occupiers and tenants should be treated evenly. Since local authority rates are the only tax specifically levied on real property in New Zealand, a principal question this article seeks to answer is how such even-handedness might play out in the field of local taxation. The article, which has a particular contextual focus on Auckland, where a housing shortage is acute, is structured as follows. First, the concept of home is outlined. Following Margaret Radin's distinction, the possibility of the space identified as home being personhood, rather than fungible, property is considered. Second, the benefits of owner-occupation are discussed with a focus on tax privileges. Third, the nature of local authority rating is considered. Different classes of ratepayer are identified in order to reveal inequitable treatment of these different classes. Fourth, the issues of local authorities' inability to achieve equity outcomes and of efficiency are noted. Finally, conclusions are drawn.
