Abstract
AbstractThe article investigates the home ownership effects of abolishing deductions for negative gearing losses and halving the capital gains tax discount under Australian income tax laws. Home ownership evolves according to the balance of annual purchases and sales by owner‐occupiers and investors. This transaction‐based perspective on home ownership implies an important role for average holding periods, which determine the share of established homes sold each year. The tax change is estimated to increase the owner‐occupied share of the private dwelling stock by 4.7%, of which 2.1 percentage points are attributable to shorter investor holding periods.
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