IDEAS home Printed from https://ideas.repec.org/p/ema/worpap/2023-21.html
   My bibliography  Save this paper

Non-Taxation of imputed rent: A gift to Scrooge ? Evidence from France

Author

Listed:
  • Montserrat Botey
  • Guillaume Chapelle

    (Université de Cergy-Pontoise, THEMA)

Abstract

The dramatic rise in wealth inequalities has generated debates on the oppor- tunity to tax wealth (Piketty, 2014; Garbinti et al., 2017). Increasing housing prices are, to a great extent, driving these widening wealth disparities. This paper examines the potential redistributive impact of taxing imputed rents, which usually are exempt from income taxation. We estimate tax savings and their distribution between households in France by using a fiscal simulator that Landais et al. (2011) developed. We find that while net imputed rents represent 7% of national net income, their nontaxation amounts to hidden fiscal spending (i.e., tax expenditures) totaling up to 11 billion euros annually. This indicates that nontaxation is the largest public spending directed at homeowners, bene- fiting mostly the oldest and wealthiest households. Replacing the property tax with imputed rent taxation could favor the youngest and poorest households, who went through a steady decline in their homeownership rates over the past few decades.

Suggested Citation

  • Montserrat Botey & Guillaume Chapelle, 2023. "Non-Taxation of imputed rent: A gift to Scrooge ? Evidence from France," THEMA Working Papers 2023-21, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2023-21
    as

    Download full text from publisher

    File URL: https://thema.u-cergy.fr/IMG/pdf/2023-21.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. M. André & O. Meslin, 2021. "Et pour quelques appartements de plus: Étude de la propriété immobilière des ménages et du profil redistributif de la taxe foncière," Documents de Travail de l'Insee - INSEE Working Papers 2021-04, Institut National de la Statistique et des Etudes Economiques.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chapelle, Guillaume & Domènech Arumí, Gerard & Gobbi, Paula Eugenia, 2023. "Housing, Neighborhoods and Inequality," CEPR Discussion Papers 17969, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Housing; Wealth; Imputed Rents; Taxation ; Inequalities;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ema:worpap:2023-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefania Marcassa (email available below). General contact details of provider: https://edirc.repec.org/data/themafr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.