Research Discussion Papers, Bank of Finland
The optimal tax treatment of housing capital in the neoclassical growth model
() and Niku Määttänen
Abstract: In a dynamic setting, housing is both an asset and a
consumption good. But should it be taxed like other forms of consumption or
like other forms of saving? We consider the optimal taxation of the imputed
rent from owner housing within a version of the neoclassical growth model.
We find that the optimal tax rate on the imputed rent is quite sensitive to
the constraints imposed on the other available tax rates. In general, it is
not optimal to tax the imputed rent at the same rate as the business
Keywords: housing; capital taxation; optimal taxation; (follow links to similar papers)
JEL-Codes: E21; H21; (follow links to similar papers)
34 pages, July 11, 2005
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