Taxation of Owner-Occupied and Rental Housing: Working Paper 2012-14

Larry Ozanne

No 43691, Working Papers from Congressional Budget Office

Abstract: This paper illustrates how the different tax treatments of owner-occupied and rented houses affect the relative costs of owning and renting. In the examples, a representative landlord computes the rental rate (the ratio of the rent to the value of the house) required to break even on an investment in a house. Potential homeowners compare that market rental rate as a tenant with an implicit rental rate that reflects the cost of owning a home. The tax advantages tend to make owning more advantageous than renting for higher-income households, but lower-

Date: 2012-11-05
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Persistent link: https://EconPapers.repec.org/RePEc:cbo:wpaper:43691

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