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Strategies of Subsidizing Private Housing Property on the Example of IBD (Partial Buying of Percentage) and MID (Limited Tax Deduction of Percentage)

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  • Anna Białek

Abstract

The meeting of the housing needs of society is determined by the general level of economic development of the country and the level of incomes and wealth of the society as well as by the inherited size and quality of the housing resources and the legal-institutional solutions forming the market system of housing economy. The best and cheapest strategy of supporting housing is the stimulation of the lowering of the costs of financing housing investments with the simultaneous endeavour to increase the disposable incomes of potential acquirers on the housing market by means of subsidy strategies. Since the general social cost of excessive subsidies exceeds the magnitude of engaged budget means, therefore a better solution is the support of citizens in their efforts undertaken to obtain a dwelling without excessive commitment of the financial means of the state. Without changes favouring the increase of supply the subsidies granted to consumers are translated only into an increase of prices. In view of the need of a rational support of housing construction in Poland, the tax system was changed in the direction of limiting reliefs and discounts, liquidating a large tax relief in housing construction. This article is aimed at considering the alternative for the liquidated system of large building reliefs for private housing property in the form of limited discount of percentage from the drawn longterm housing credits MID and the partial repurchase of IBD percentage from the basis of taxation of the incomes of physical persons.

Suggested Citation

  • Anna Białek, 2003. "Strategies of Subsidizing Private Housing Property on the Example of IBD (Partial Buying of Percentage) and MID (Limited Tax Deduction of Percentage)," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 9.
    • Handle: RePEc:eko:ekoeko:9_180
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    References listed on IDEAS

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    4. Woodward, Susan E. & Weicher, John, 1989. "Goring the Wrong Ox: A Defense of the Mortgage Interest Deduction," National Tax Journal, National Tax Association, vol. 42(3), pages 301-13, September.
    5. Steven C. Bourassa & Donald R. Haurin & R. Jean Haurin & Patric H. Hendershott, 1994. "Independent Living and Home Ownership: An Analysis of Australian Youth," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 27(3), pages 29-44, July.
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