Non-Taxation of imputed rent: A gift to Scrooge ? Evidence from France

Montserrat Botey and Guillaume Chapelle ()
Additional contact information
Guillaume Chapelle: Université de Cergy-Pontoise, THEMA

No 2023-21, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: The dramatic rise in wealth inequalities has generated debates on the oppor- tunity to tax wealth (Piketty, 2014; Garbinti et al., 2017). Increasing housing prices are, to a great extent, driving these widening wealth disparities. This paper examines the potential redistributive impact of taxing imputed rents, which usually are exempt from income taxation. We estimate tax savings and their distribution between households in France by using a fiscal simulator that Landais et al. (2011) developed. We find that while net imputed rents represent 7% of national net income, their nontaxation amounts to hidden fiscal spending (i.e., tax expenditures) totaling up to 11 billion euros annually. This indicates that nontaxation is the largest public spending directed at homeowners, bene- fiting mostly the oldest and wealthiest households. Replacing the property tax with imputed rent taxation could favor the youngest and poorest households, who went through a steady decline in their homeownership rates over the past few decades.

Keywords: Housing; Wealth; Imputed Rents; Taxation; Inequalities (search for similar items in EconPapers)
JEL-codes: D31 H23 I31 I32 R38 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-eur, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://thema.u-cergy.fr/IMG/pdf/2023-21.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2023-21

Access Statistics for this paper

More papers in THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise Contact information at EDIRC.
Bibliographic data for series maintained by Stefania Marcassa ( this e-mail address is bad, please contact ).