NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Taxation and Housing Markets: Preliminary Evidence on the Effects of Recent Tax Reforms

James M. Poterba

NBER Working Paper No. 3270 (Also Reprint No. r1611)
Issued in September 1991
NBER Program(s):   PE

The tax changes of the 1980s altered the incentives for housing consumption. Marginal tax rate reductions in both the Economic Recovery Tax Act (1981) and the Tax Reform Act (1986) reduced the attraction of homeownership, particularly at high income levels. The Tax Reform Act, by lowering depreciation allowances and implementing anti-tax shelter provisions, also reduced the net tax subsidy to rental housing. In the long run these changes will raise real rents and reduce the fraction of national income that is allocated to housing. Preliminary evidence shows a pronounced decline in rental housing construction since the 1986 tax bill, as well as a decline in the real price of owner-occupied homes which may be partly attributable to the tax change.

download in pdf format
   (240 K)

download in djvu format
   (176 K)

email paper

This paper is available as PDF (240 K) or DjVu (176 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Slemrod, Joel (ed.) Do Taxes Matter? The Impact of the Tax Reform Act of 1986. Cambridge, MA: The MIT Press, 1990.

Users who downloaded this paper also downloaded these:
Poterba Taxation and Housing Markets
Poterba w3963 Taxation and Housing: Old Questions, New Answers
Hendershott and Slemrod w0929 Taxes and the User Cost of Capital for Owner-Occupied Housing
Poterba and Sinai w14253 Income Tax Provisions Affecting Owner-Occupied Housing: Revenue Costs and Incentive Effects
Glaeser and Shapiro w9284 The Benefits of the Home Mortgage Interest Deduction
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us