Implications of US Tax Policy for House Prices, Rents, and Homeownership

• 成果类型: Article
• 署名作者: Sommer, Kamila; Sullivan, Paul
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; American University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20141751
• 发表日期: 2018
• 页码: 241-274
• 关键词: taxation; MARKET

摘要

This paper studies the impact of the mortgage interest tax deduction on equilibrium house prices, rents, homeownership, and welfare. We build a dynamic model of the housing market that features a realistic progressive tax system in which owner-occupied housing services are tax-exempt and mortgage interest payments are tax-deductible. We simulate the effect of tax reform on the housing market. Eliminating the mortgage interest deduction causes house prices to decline, increases homeownership, decreases mortgage debt, and improves welfare. Our findings challenge the widely held view that repealing the preferential tax treatment of mortgages would depress homeownership.