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Non-Taxation of Imputed Rent: A Gift to Scrooge? Evidence from France

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  • Montserrat Botey
  • Guillaume Chapelle

Abstract

[eng] The dramatic rise in wealth inequalities has generated debates on the opportunity to tax wealth. Increasing housing prices are, to some extent, driving these widening wealth disparities. This paper examines the potential redistributive impact of taxing imputed rents, which usually are exempt from income taxation. We estimate tax savings and their distribution between households in France by using a fiscal simulator that Landais et al. (2011) developed. We find that while net imputed rents represent 7% of national net income, their non-taxation amounts to hidden fiscal spending (i.e. tax expenditures) totaling up to 11 billion euros annually. This indicates that non-taxation is the largest public spending directed at homeowners, benefiting mostly the oldest and wealthiest households.

Suggested Citation

  • Montserrat Botey & Guillaume Chapelle, 2023. "Non-Taxation of Imputed Rent: A Gift to Scrooge? Evidence from France," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 541, pages 55-79.
    • Handle: RePEc:nse:ecosta:ecostat_2023_541_4
    DOI: https://doi.org/10.24187/ecostat.2023.541.2107
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    References listed on IDEAS

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    1. Gabrielle Fack, 2005. "Pourquoi les ménages pauvres paient-ils des loyers de plus en plus élevés ? [L’incidence des aides au logement en France (1973-2002)]," Économie et Statistique, Programme National Persée, vol. 381(1), pages 17-40.
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