Tax Rates and Implicit Rates of Return on Owner-Occupied Single-Family Housing
Private sector investors, as well as public sector policy analysts and consumers, need accurate historical estimates of returns for single-family houses. In addition, researchers need such data to understand capital flows and supply/demand relationships among asset classes. Unfortunately, such estimates have not been available on a comprehensive basis. Each previous study used only a very few samples. This study alleviates these problems by providing returns for single years, and possible holding period, levered (most realistic) and unlevered examples, from appreciation and cash flow separately. It then adjusts each of these for six different tax brackets (0%, 10%, 20%, 30%, 40% and 50%). This should help focus the debate on the "effect of inflation on the demand for housing." The comprehensive rate-of-return information provided here is compared to returns for other assets to determine relative attractiveness. The results obtained indicate generally lower rates of return on owner-occupied, single-family housing than previous studies and a priori expectations.
Volume (Year): 2 (1987)
Issue (Month): 2 ()
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- Mike Miles & Tom McCue, 1984. "Commercial Real Estate Returns," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 12(3), pages 355-377.
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