Business Economics and Public Policy Papers
Document Type
Working Paper
Date of this Version
2008
Publication Source
American Economic Review
Abstract
Federal income tax policy affects the cost of homeownership for many households. Popular discussions of the favor able tax treatment of owner occupied housing usually focus on the tax-deductibility of mortgage interest and property tax payments, as well as the specialized tax rules that affect housing capital gains. Academic discussions, in contrast, emphasize the exclusion of the imputed rental income on owner-occupied housing as the key tax benefit for homeowners. This paper summarizes the current distribution of the tax benefits associated with the mortgage interest and property tax deductions. It contrasts them with the distribution of tax benefits associated with the current tax regime for imputed rental income relative to one which taxed homeowners as if they were landlords. It also reports how removing either deduction, or taxing homeowners as landlords, would affect the user cost of owner-occupied housing.
Keywords
tax, expenditures, owner-occupied, deductions, taxes
Recommended Citation
Poterba, J., & Sinai, T. (2008). Tax Expenditures for Owner-Occupied Ho using: Deductions for Property Taxes and Mortgage Interest and the Exclusion of Imputed Rental Income. American Economic Review, Retrieved from https://repository.upenn.edu/bepp_papers/72
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Business Commons, Economics Commons, Public Affairs, Public Policy and Public Administration Commons
Date Posted: 27 November 2017