Strategic Interaction between Inter Vivos Gifts and Housing Acquisition

Norifumi Yukutake, Shinichiro Iwata and Takako Idee

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: To consider the policy event of a gift tax reduction earmarked for housing acquisition, the interdependence of parental gifts and children's housing investments is modeled, considering an informal care issue behind such decision making. The empirical results, which use a sample of households who purchased a house in Japan, demonstrate that such a tax cut would appear to have the following limited effects on boosting housing investment in equilibrium. First, even though transfers are encouraged, they consequently reduce housing investment because the housing investment function is negatively related to gifts. Second, increments in housing investment are further discouraged because the slopes of the gift and housing investment functions have opposite signs.

Keywords: Intergenerational Transfer; Housing Investment; Gift Tax (search for similar items in EconPapers)
JEL-codes: D11 D12 J14 R21 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-ure
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Journal Article: Strategic interaction between inter vivos gifts and housing acquisition (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd11-201

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