Capital Gains Taxation and Residential Mobility in Sweden

Per Lundborg and Per Skedinger

No 446, Working Paper Series from Research Institute of Industrial Economics

Abstract: Theoretical studies have shown that capital gains taxes in the housing market may create lock-in effects but so far no empirical evidence has been presented regarding the size of these effects. For a panel of Swedish house owners in 1984-1990, we show that lock-in effects only appear for households with income reductions; the size of these lock-in effects crucially depends on the magnitude of the income loss. The theoretical model and features of the Swedish tax system imply that lock-in effects depend on the degree of mismatch in the current residence and whether the households buy up or by down.

Keywords: Capital Gains Taxes; Residential Mobility (search for similar items in EconPapers)
JEL-codes: H20 R20 (search for similar items in EconPapers)
Pages: 22 pages
Date: 1995-11
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Related works:
Journal Article: Capital gains taxation and residential mobility in Sweden (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0446

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