Journals / Ekonomi-tek / 2013 / Cilt: 2 - Sayı: 2
Housing, Collateral Constraints, and Fiscal Policy
- Journal
- Ekonomi-tek
- Pages
- 53–81
- DOI
- —
Abstract
This paper studies the preferential tax treatment of housing that can be observed in many industrialized countries. It provides a rationale for it by means of an optimal taxation approach, taking into account an important feature of housing, namely its usage as collateral. In a borrower-lender framework, where private loans are assumed to be non-enforceable and have to be collateralized by housing, optimal fiscal policy should disburden constrained borrowers by subsidizing their housing.
Özet
This paper studies the preferential tax treatment of housing that can be observed in many industrialized countries. It provides a rationale for it by means of an optimal taxation approach, taking into account an important feature of housing, namely its usage as collateral. In a borrower-lender framework, where private loans are assumed to be non-enforceable and have to be collateralized by housing, optimal fiscal policy should disburden constrained borrowers by subsidizing their housing.