Tenure neutral and equitable housing taxation
Equity and neutrality are distinct concepts in housing taxation and weak and strong tenure neutrality should be distinguished. When a tax system is tested for those criteria, the taxes paid by landlords must be included, as they affect the rents renters pay. This paper defines appropriate tests, applies them to a stylised tax system and proposes tax changes designed to restore tenure equity and/or neutrality. It shows how the homeowner's implicit income should be computed for taxes to be fundamentally tenure neutral or equitable or both. It also shows the key role played by the cost differential in producing housing services under owner-occupation and renting.
Urban Studies 2007.pdf
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