Working papers in Real Estate Law and Real Estate Economics,
Lund University, Division of Real Estate Science

Abstract: In this article, we use detailed income and tax register data from 2008 to 2021, covering the entire Swedish population, to investigate whether older adults use tax subsidies for households (RUT) and home repair (ROT) services to a larger extent than other age groups and whether usage affects the probability of moving. We show that older adults are more likely to use RUT and ROT than younger adults. In addition, the results from multivariate regression analyses show that older adults using ROT are less likely to move than non-users while controlling for many other factors. This suggests that ROT enables older adults to age in place, possibly by using ROT to adjust their homes to new needs as they age. However, the tax subsidy RUT increases the probability of moving in all age groups.

One main policy aim of the tax subsidies RUT and ROT was to increase labour participation by encouraging households to buy household and home repair services in the formal rather than informal market. Hence, the subsidies aimed to convert jobs from the informal to the formal market with social security benefits. Our study shows that the tax subsidies, RUT and ROT, also impact the probability to move, an unintended effect of the tax subsidies.

Keywords: ageing population; housing; tax policy; housing market

JEL-codes: D10

Language: English

27 pages, October 11, 2024

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