Housing Capital Gains across the Income Distribution

We show that high-income buyers earn higher capital gains on housing using detailed transaction data from Denmark. Geographic location statistically accounts for nearly all the difference, with little role for aggregate market timing, property type, or other buyer characteristics. This finding is consistent with income-based sorting, whereby higher-income households systematically sort into locations with persistently higher price growth. We test whether credit conditions shape access to locations with higher house-price growth and find no detectable change in buyer composition by income rank around major credit expansions and contractions.

Keywords: Housing, Wealth Inequality, Affordability, Spatial Sorting, Inequality

JEL Classification: D31, R31, G51

Suggested Citation: Suggested Citation

Bäckman, Claes and D'Lima, Walter and Khorunzhina, Natalia, Housing Capital Gains across the Income Distribution (January 26, 2026). SAFE Working Paper No. 467, Available at SSRN: https://ssrn.com/abstract=6173064 or http://dx.doi.org/10.2139/ssrn.6173064