Non-Taxation of Imputed Rent: A Gift to Scrooge? Evidence from France

Montserrat Botey and Guillaume Chapelle

Economie et Statistique / Economics and Statistics, 2023, issue 541, 55-79

Abstract: [eng] The dramatic rise in wealth inequalities has generated debates on the opportunity to tax wealth. Increasing housing prices are, to some 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 non-taxation amounts to hidden fiscal spending (i.e. tax expenditures) totaling up to 11 billion euros annually. This indicates that non-taxation is the largest public spending directed at homeowners, benefiting mostly the oldest and wealthiest households.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:nse:ecosta:ecostat_2023_541_4

DOI: 10.24187/ecostat.2023.541.2107

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