Research Report New Estimates of Tax Reform's Effect on Housing Prices
Benjamin H. Harris
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The impact of tax reform on housing prices has traditionally been studied by examining the user cost of capital the after-tax cost to the homeowner per unit of housing. This brief summarizes findings from a new discrete period approach which considers the time element of housing investment and accounts for one-time transaction costs, such as transfer taxes, settlement fees, and realtor commissions. Under this framework, tax reform yields much smaller estimated house price declines and some reforms are estimated to actually boost housing prices.
Research Areas Economic mobility and inequality Taxes and budgets Housing Wealth and financial well-being
Tags Fiscal policy Federal housing programs and policies State and local tax issues Individual taxes Federal budget and economy Campaigns, proposals, and reforms Federal tax issues and reform proposals
Policy Centers Urban-Brookings Tax Policy Center