EconPapers    
Economics at your fingertips  
 

The Housing Ladder, Taxation, and Borrowing constraints

Swank J., Jan Kakes () and Alexander F. Tieman

WO Research Memoranda (discontinued) from Netherlands Central Bank, Research Department

Abstract: Using a multi-tier model of the housing market, we show that both starters and movers benefit from mortgage interest deduction for higher income groups. However, such tax favouring also tends to facilitate house price explosions, especially when interest rates are low and LTV-ratios are high. More in general, the efficiency of implicit tax subsidies to homeowners depends critically on the price responsiveness of new construction, which is found to differ strongly from country to country. Irrespective of supply conditions, lending institutions are likely to lose by policies aimed at limiting the deductibility of mortgage interest payments. JEL Classification: G12; G21; H20; R31

Keywords: House prices; Housing market; Mortgage lending; Taxation (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (12) Track citations by RSS feed

Downloads: (external link)
http://www.dnb.nl/binaries/wo0688_tcm46-145986.pdf (application/pdf)

Related works:
Working Paper: The housing ladder, taxation, and borrowing constraints (2002) Downloads
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: http://EconPapers.repec.org/RePEc:dnb:wormem:688

Access Statistics for this paper

More papers in WO Research Memoranda (discontinued) from Netherlands Central Bank, Research Department
Contact information at EDIRC.
Series data maintained by Rob Vet ().

 
Page updated 2014-12-07
Handle: RePEc:dnb:wormem:688