Equity and Neutrality in Housing Taxation

FAME Research Paper No. 147

24 Pages Posted: 8 Aug 2005 Last revised: 28 May 2015

See all articles by Philippe Thalmann

Philippe Thalmann

Swiss Federal Institute of Technology Lausanne - Ecole Polytechnique Federale de Lausanne (EPFL)

Date Written: June 1, 2005

Abstract

Equity and neutrality are distinct concepts in housing taxation and weak and strong tenure neutrality should be distinguished. When a tax system is tested for those criteria, the taxes paid by landlords must be included, as they affect the rents renters pay. This paper defines appropriate tests, applies them to a stylised tax system and simulates tax changes designed to restore equity and/or neutrality. It shows how the homeowner's implicit income should be computed for taxes to be fundamentally tenure neutral or equitable or both. And it shows the key role played by the differential in producing housing services under owner-occupation and renting.

Keywords: Housing taxation, tenure choice, tax equity, tax neutrality

JEL Classification: R21, R31, H21

Suggested Citation

Thalmann, Philippe, Equity and Neutrality in Housing Taxation (June 1, 2005). FAME Research Paper No. 147, Available at SSRN: https://ssrn.com/abstract=770605

Philippe Thalmann (Contact Author)

Swiss Federal Institute of Technology Lausanne - Ecole Polytechnique Federale de Lausanne (EPFL) ( email )

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Lausanne, CH-1015
Switzerland
+41 21 693 7321 (Phone)

HOME PAGE: http://people.epfl.ch/philippe.thalmann

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