Eurozone tax systems subsidise housing debt, ECB paper argues

Social housing
Houses, possibly tax-subsidised

A working paper published by the European Central Bank attempts to quantify the size of tax-induced distortions to different national housing markets.

In Housing and the tax system: how large are the distortions in the euro area? Serena Fatica and Doris Prammer evaluates the size of the preferential tax treatment of owner-occupied housing in the eurozone.

The authors use an analytical framework based on the “user cost of capital”, estimating “the annual tax-adjusted cost of owning and operatin