Center for Policy Research
Property Tax Web Series
Tax Subsidies and Housing Affordability
Anastasia Girshina, François Koulischer, and Ulf von Lilienfeld-Toal
October 2023
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Abstract
We argue that the incidence of tax subsidies to make housing affordable depends on four parameters: the elasticity of supply and demand, and the distribution of housing ownership and consumption. We estimate these parameters with administrative data on real estate transactions and survey data on household balance sheets in Luxembourg. Using kinks in the taxes on transactions and on new constructions, we find that the top 10% of households by real estate wealth capture between 17% and 26% of the surplus from housing tax subsidies.
This paper was presented by François Koulischer (University of Luxemburg) on October 27, 2023 as part of the 2023-2024 Syracuse-Chicago Webinar Series on Property Tax Administration and Design. Sebastien Bradley (Drexel University) was the discussant for this presentation.
This Syracuse-Chicago Webinar Series on Property Tax Administration and Design aims to gather insight and scholarship through domestic and international comparative studies with common threads to help reform and improve property tax administration and design in the U.S. and other countries facing similar problems.
For questions about the webinars, please contact Zia Jackson. For questions about this paper, please contact the author or authors.