The Role of Housing Tax Provisions in the 2008 Financial Crisis
AbstractThe 2008 financial crisis is the worst economic crisis since the Great Depression of 1929. It has been characterised by a housing bubble in a context of rapid credit expansion, high risk-taking and exacerbated financial leverage, ending into deleveraging and credit crunch when the bubble burst. This paper discusses the interactions between housing tax provisions and the financial crisis. In particular, it reviews the existing evidence on the links between capital gains taxation of houses, interest mortgage deductibility and characteristics of the crisis.
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Bibliographic InfoPaper provided by Directorate General Taxation and Customs Union, European Commission in its series Taxation Papers with number 27.
Length: 35 pages
Date of creation: Mar 2011
Date of revision:
Publication status: Published in Julian S. Alworth and Giampaolo Arachi (eds), 2012, Taxation and the Financial Crisis, chapter 3, Oxford University Press.
financial crisis; tax policy; housing; interest deductibility; capital gains;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-03-19 (Accounting & Auditing)
- NEP-ALL-2011-03-19 (All new papers)
- NEP-FDG-2011-03-19 (Financial Development & Growth)
- NEP-MAC-2011-03-19 (Macroeconomics)
- NEP-PBE-2011-03-19 (Public Economics)
- NEP-URE-2011-03-19 (Urban & Real Estate Economics)
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