Abstract
In this paper, we focus on the tax deductibility of mortgage loans, which is a key measure of housing policies in many countries. Several studies have shown that the distribution of the benefits of this measure runs counter to the vertical equity principle. We contribute to the existing literature by addressing the distribution of the tax deductibility of mortgage loans considering the spatial outcomes of this policy. We use Belgian data to measure the impact of this policy on households' income and inequality and poverty in different types of areas. We show that this measure favours suburban households and subsidizes urban sprawl. Exogenous factors such as past housing policies and homeownership determinants play a key role in this phenomenon. We also simulate the distributional impact of three stylized reforms of the deductibility of mortgage loans in Belgium. These simulations show that the distributional outcomes could be improved on both social and spatial sides.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
