
Tax policy and its relationship to housing is a big topic. This post will not be a comprehensive treatise on the subject. I will look at several areas of tax policy and see what incentives they create and how changes in these areas would impact housing prices. This includes three broad areas: ownership taxes and subsidies, debt subsidies, and appreciation taxes. Ownership taxes and subsidies include property taxes, special tax levies, and the impact of proposition 13. Debt subsidies include the home mortgage interest deduction and its relationship to the personal exemption. Appreciation taxes are capital gains and income taxes from the profitable sale of residential real estate. Ownership Taxes and Subsidies Property taxes have long been a source of…[READ MORE]