Tax Deductions, Tax Credits and the Homeownership Rate of Young Urban Adults in the United States

Abstract

The US President's Advisory Panel on Federal Tax Reform has recommended changes to income tax concessions for homeowners. Consistent with the opinions of many economists, the tax reform panel concluded that the existing tax concessions are not particularly effective. The housing and mortgage industry have opposed the reforms, in part due to a fear that the reforms will reduce the homeownership rate. In this paper, 1998 American Housing Survey data are used to estimate a tenure choice equation and to simulate hypothetical changes in tax concessions. Focusing on young households who are likely to be on the margin between renting and owning, it is concluded that the mortgage interest and property tax deductions reduce the homeownership rate for these households due to effects on house prices. The tax credit proposed by the Advisory Panel would be likely to have a similar effect.

Pathways to housing tax reform

“…They also suggest that Australia faces the risk of considerable intergenerational inequity arising from its current tax treatment of investment property ('residential capitalism') and its use of property to build wealth rather than treating housing as a social right (Bourassa and Yin 2008;Mortensen and Seabrooke 2008 (Bentley and D'Cruz 2016;Eslake 2015;Grudnoff 2015a;Pape 2016;Quiggin 2015). Recent discussion of 'budget repair' has led some to advocate housing tax changes as a source of additional government revenue (CEDA Balanced Budget Commission 2016; Daley, Wood, et al 2016;Evans, Minas et al 2015;Grudnoff 2016).…”

Regionalne zróżnicowanie polityki mieszkaniowej. Przykład programu „Rodzina na swoim”

“…Oprócz USA politykę zachęcającą do zaciągania kredytów hipotecznych prowadziło lub prowadzi nadal szereg państw zachodnioeuropejskich, w tym Francja, Niemcy oraz Wielka Brytania (Donner 2000), a także kraje pozaeuropejskie, np. Tajwan (Bourassa, Yin 2008). Spośród dawnych krajów socjalistycznych na największą chyba skalę dopłaty do kredytów stosowano na Węgrzech, podczas gdy Czechy postawiły raczej na stworzenie systemu zachęt do oszczędzania na cele mieszka niowe (Hegedus i in.…”

“…dopłaty skutkować mogą wzrostem cen mieszkań bądź też wyższym oprocentowaniem kredytów, a przez to de facto utrudniać, a nie ułatwiać drogę do nabycia własnego mieszkania (Berger i in. 2000, Bourassa, Yin 2008, Benchetrit, Czamanski 2009). Część autorów mimo wszystko jest zdania, że preferencje ze strony państwa dla kredytobiorców są potrzebnym elementem polityki społecznej, jednakże pogląd ten wydaje się mniej rozpowszechniony (Weicher 2000).…”

Housing Finance, Prices, and Tenure in Switzerland

“…In the U.S., for example, imputed rent and housing wealth are not taxed, and capital gains are not taxed in most cases. Consequently, the user cost per U.S. dollar of investment is (Bourassa and Yin, 2008):…”