House ownership and taxes

Torfinn Harding, Haakon O. Aa. Solheim and Andreas Benedictow ()
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Andreas Benedictow: Statistics Norway, https://www.ssb.no/en/forskning/ansatte

Discussion Papers from Statistics Norway, Research Department

Abstract: The household portfolio is dominated by a small number of assets; primarily housing and mortgages. We compare data on actual portfolios of Norwegian households with estimated optimal portfolios, using traditional financial theory. We find actual portfolios to be close to the portfolio indicated by a mean-variance frontier, based on four assets and estimated under assumptions of short sale constraints. This result is sustained even in a no-tax regime. To induce a substantial change from housing to equity, taxation of the consumption stream from housing is needed. An alternative; taxation of capital gains from housing investment; could actually increase the relative holding of housing.

Keywords: Households; portfolio choice; consumption tax; capital gains tax. (search for similar items in EconPapers)
JEL-codes: G11 H2 H31 (search for similar items in EconPapers)
Date: 2004-11
New Economics Papers: this item is included in nep-fin, nep-pbe and nep-pub
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Citations: View citations in EconPapers (3)

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