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Rental housing for a French taxpayer: are there tax arbitrage opportunities in the USA?

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  • Christophe Schalck

Abstract

The aim of this paper is to identify tax arbitrage opportunities in the field of rental housing in France and the USA. We conducted tax simulations for investments made in the USA or France. We compared total net rental incomes, capital gains and present investment values based on different tax regimes. Our results show that rental housing in the USA under the Effectively Connected Income classification serves as the best option, as it generates the highest present investment value. We performed several robustness exercises and we showed that our results are strengthened in cases of stronger price appreciation in the USA than in France and in cases of high landlord tax brackets.

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  • Christophe Schalck, 2016. "Rental housing for a French taxpayer: are there tax arbitrage opportunities in the USA?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(13), pages 921-925, September.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:13:p:921-925
    DOI: 10.1080/13504851.2015.1119787
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    References listed on IDEAS

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    1. Peter Englund, 2003. "Taxing Residential Housing Capital," Urban Studies, Urban Studies Journal Limited, vol. 40(5-6), pages 937-952, May.
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    4. Wood, Gavin A., 2001. "Are There Tax Arbitrage Opportunities in Private Rental Housing Markets?," Journal of Housing Economics, Elsevier, vol. 10(1), pages 1-20, March.
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