Taxation and Housing Markets: Preliminary Evidence on the Effects of Recent Tax Reforms / James M. Poterba.

Format:

Book

Author/Creator:

Poterba, James M.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3270.

NBER working paper series no. w3270

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Taxation and Housing Markets

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1990.

Summary:

The tax changes of the 1980s altered the incentives for housing consumption. Marginal tax rate reductions in both the Economic Recovery Tax Act (1981) and the Tax Reform Act (1986) reduced the attraction of homeownership, particularly at high income levels. The Tax Reform Act, by lowering depreciation allowances and implementing anti-tax shelter provisions, also reduced the net tax subsidy to rental housing. In the long run these changes will raise real rents and reduce the fraction of national income that is allocated to housing. Preliminary evidence shows a pronounced decline in rental housing construction since the 1986 tax bill, as well as a decline in the real price of owner-occupied homes which may be partly attributable to the tax change.

Notes:

Print version record

February 1990.