An assessment of the spatial efficiency of tax benefits for home mortgages in Belgium

[en] In this paper, we focus on the tax deductibility of mortgage loans, which is a key measure of housing policies in many countries. Several studies have shown that the distribution of the benefits of this measure runs counter to the vertical equity principle. We contribute to the existing literature by addressing the distribution of the tax deductibility of mortgage loans considering the spatial outcomes of this policy. We use Belgian data to measure the impact of this policy on households' income and inequality and poverty in different types of areas. We show that this measure favours suburban households and subsidizes urban sprawl. Exogenous factors such as past housing policies and homeownership determinants play a key role in this phenomenon. We also simulate the distributional impact of three stylized reforms of the deductibility of mortgage loans in Belgium. These simulations show that the distributional outcomes could be improved on both social and spatial sides.

Disciplines :

Special economic topics (health, labor, transportation...)
Human geography & demography
Microeconomics

Author, co-author :

Xhignesse, Guillaume ; Université de Liège - ULiège > Département de droit > Finances publiques et politique économique

Verbist, Gerlinde; Universiteit Antwerpen - UA > Centrum voor Sociaal Beleid Herman Deleeck

Language :

English

Title :

An assessment of the spatial efficiency of tax benefits for home mortgages in Belgium

Publication date :

May 2019

Journal title :

Housing Studies

ISSN :

0267-3037

eISSN :

1466-1810

Publisher :

Taylor and Francis, Abingdon, United Kingdom

Peer reviewed :

Peer Reviewed verified by ORBi

Funders :

F.R.S.-FNRS - Fonds de la Recherche Scientifique [BE]

Available on ORBi :

since 31 July 2020

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