Income Tax Concessions for Owner-Occupied Housing

Fannie Mae Foundation - Housing Policy Debate, Volume 11, Issue 3

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Date Published 2000
Primary Author Steven C. Bourassa and William G. Grigsby
Other Authors
Country United States


This article considers arguments for and against the major tax concessions for owner-occupied housing in the Internal Revenue Code — concessions that have a significant effect on the federal budget. It recommends retaining two of the concessions — non-taxation of net imputed income and exemption of capital gains—and abolishing two others — the mortgage interest and real estate tax deductions. After a review of the market impact of removing each deduction, the article concludes that an appropriate phase-out period of 15 to 20 years would virtually eliminate adverse effects on house prices and homeowners.

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