Research Report New Perspectives on Homeownership Tax Incentives
Amanda Eng, Benjamin H. Harris, C. Eugene Steuerle
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This report presents three tax reforms designed to promote homeownership through a channel other than the deductibility of mortgage interest. These reforms include a first-time homebuyer tax credit, a refundable tax credit for property taxes paid, and an annual flat amount tax credit for homeownersall paid for by limiting current tax expenditures for housing. Although far from perfect, these reforms would provide a more efficient and equitable allocation of housing subsidies. Our simulations show that relative to existing incentives, each policy would raise home prices and make the tax code more progressive.
Research Areas Economic mobility and inequality Taxes and budgets Housing
Tags Fiscal policy Federal housing programs and policies Individual taxes Federal budget and economy Income and wealth distribution
Policy Centers Urban-Brookings Tax Policy Center