Impact of National Tax Policies on Homeownership.

"Though most would argue that homeownership gains more from federal income tax structure than does owning rental stock, some tax benefits accrue to landlords that do not accrue to owner‐occupants. This paper explores the differences between the costs of owning housing and the rents landlords must charge to earn a certain return on equity for particular properties, in various years from 1960 to the present. The paper also speculates on the effects of certain changes in the tax structure on costs to owners and landlords through the 1980s. In the 1960s the advantages of being an owner‐occupant over being a landlord increased as the value of the property increased. This trend became more pronounced in the early to mid‐1970s, and it continued into the late 10702, though the differences between owners and landlords became less marked. The economics of the early 1980s revived the balance between the two groups, but with exceptionally high real estate prices." The authors conclude that although real estate offers "a good tax shelter, given deducibility of interest and taxes, measures aimed at decreasing such advantages would present even greater problems." [ABSTRACT FROM PUBLISHER]