Annex I. Actual and Estimated Long-run Equilibrium House Prices in Selected OECD
Andersen, A. L., C. Duus, and T. L. Jensen, 2014, “Household Debt and Consumption During the Financial Crisis: Evidence from Danish Micro Data,” Working Paper no. 89, Danmarks Nationalbank.
Anundsen, A.K. and C, Heebøll, 2016, “Supply Restrictions, Subprime Lending and Regional US House Prices,” Journal of Housing Economics, 31: pp. 54—72.
Aoki, K., Proudmand, J., Vlieghe, G., 2002, “House Prices, Consumption and Monetary Policy: A Financial Accelerator Approach,” Mimeo, Bank of England, Presented at the 2002 CEPR European Summer Symposium in Macroeconomics.
Caldera Sanchez and Johansson, 2011, “The Price Responsiveness of Housing Supply in OECD Countries,” OECD Economics Department Working Papers No. 837.
Capozza, D., R. Green, and P. Hendershott, 1996, “Taxes, Mortgage Borrowing, and Residential Land Prices,” Economic Effects of Federal Tax Reform, ed. H.J. Aaron and W.G. Gale, Brookings Institution Press, Washington, pp. 171–198.
Cuerpo, C., Kalantaryan, S., and Pontuch, P., 2014, “Rental Market Regulation in the European Union,” European Commission Economic Papers 515, 2014.
Economic Institute for Construction and Housing (EIB), 2016, Investeren in de Nederlandse woningmarkt, investeringsopgaven in twaalf provinces.
FSC (The Dutch Financial Stability Committee), 2015, Aanbeveling van het Financieel Stabiliteitscomité over de LTV-limiet na 2018.
Geng, N. and N. Arnold, 2016, “The Housing Boom and Macroprudential Policy,” Norway Selected Issues, IMF Country Report No. 16/215.
Green, R. K., S. Malpezzi and S.K. Mayo, 2005, “Metropolitan-Specific Estimates of the Price Elasticity of Supply of Housing, and Their Sources,” American Economic Review 95 (2): pp.334–339.
Hilbers, P., Hoffmaister, A. W., Banerji, A., and Shi, H. Y., 2008, “House Price Developments in Europe: A Comparison,” IMF Working Paper 08/211.
Meen, G., 2001, “The Time-Series Behavior of House Prices: A Transatlantic Divide?” Journal of Housing Economics 11 (1), pp.1–23.
Mian, A., K. Rao, and A. Sufi, 2013, “Household Balance Sheets, Consumption, and the Economic Slump,” The Quarterly Journal of Economics 128 (4), 1687–1726.
Poterba, J., 1984, “Tax Subsidies to Owner-Occupied Housing: An Asset Market Approach”. Quarterly Journal of Economics 99, pp. 729–752.
Skaarup, M. and Bodker, S., 2010, “House Prices in Denmark: Are They Far from Equilibrium?” Denmark Finanministeriet Working Paper 21/2010.
Whitehead, C., Scanlon, K., Monk, S., Tang, C., Haffner, M., Lunde, J., Andersen, M. L., Voigtländer, M. (2016). Understanding the Role of Private Renting: A Four Country Case Study. Copenhagen: Boligøkonomisk Videncente
Prepared by Nan Geng (EUR).
A once in a life-time gift tax exemption of up to EUR 100,000 for a house purchase was in effect from October 2013 until the end of 2014 and has been reintroduced and made permanent as of January 1, 2017, for people that are between the age of 18 and 40.
100 percent deduction for all pre-2013 loans and for post-2013 fully amortizing loans (within 30 years). While the Netherlands is one of the few countries that tax imputed rent from home ownership, the tax level is low and much smaller than the mortgage interest deductibility (MID). A fully neutral taxation of owner-occupied housing would require full taxation of imputed rents and capital gains on housing, combined with mortgage interest deductibility.
The recently released coalition agreement proposes a much more rapid phase-out in steps of 3 percentage points annually until the basic rate of 37 percent is reached in 2023, but this is still subject to approval by the parliament.
Capozza et al. (1996) and Harris (2010) showed that tax-favoring of housing tends to encourage excessive leverage and be capitalized into house prices, without necessarily expanding housing opportunities for households.
The recurrent property tax in the Netherlands is levied at the local level and varies by region, ranging from 0.1–0.3 percent of property value.
The generous tax subsidy for owner-occupied housing and the resulting high land prices provides municipalities strong incentives for developing owner-occupied instead of private rental housing.
This OECD index takes into account if interest payments on mortgage debt are deductible from taxable income, if there are any limits on the allowed period of deduction of the deductible amount, if tax credits for loans are available, and if imputed rent from home ownership is taxed.
The Netherlands, Sweden, and Norway are the few exceptions for which MID is unbounded.
The 20 countries included in the sample are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, and United States.