Working Paper Series
Per Lundborg and Per Skedinger
Capital Gains Taxation and Residential Mobility in Sweden
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; (follow links to similar papers)
JEL-Codes: H20; R20; (follow links to similar papers)
22 pages, November 1995
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