The Role of Housing Tax Provisions in the 2008 Financial Crisis

Thomas Hemmelgarn (), Gaëtan Nicodème and Ernesto Zangari ()
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Thomas Hemmelgarn: European Commission

No 27, Taxation Papers from Directorate General Taxation and Customs Union, European Commission

Abstract: The 2008 financial crisis is the worst economic crisis since the Great Depression of 1929. It has been characterised by a housing bubble in a context of rapid credit expansion, high risk-taking and exacerbated financial leverage, ending into deleveraging and credit crunch when the bubble burst. This paper discusses the interactions between housing tax provisions and the financial crisis. In particular, it reviews the existing evidence on the links between capital gains taxation of houses, interest mortgage deductibility and characteristics of the crisis.

Keywords: financial crisis; tax policy; housing; interest deductibility; capital gains (search for similar items in EconPapers)
JEL-codes: E62 G21 H24 H31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2011-03
New Economics Papers: this item is included in nep-acc, nep-fdg, nep-mac, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Julian S. Alworth and Giampaolo Arachi (eds), 2012, Taxation and the Financial Crisis, chapter 3, Oxford University Press.

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