Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/335951 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 18303
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We examine the role of owner-occupied housing for income inequality. Departing from related work, we incorporate accrued capital gains, focus on long-run measures of income, and consider implications for tax progressivity. Using Australia as a case study, we show that housing income can have major implications for the apparent level and trends over time of inequality, progressivity of taxes and transfers, as well as the demographic profile of the rich and the poor. When imputed rent and accrued capital gains—neither of which are taxed—are included in the income base, the redistributive impact of income tax is reduced by 40%.
Subjects: 
inequality
housing
tax progressivity
JEL: 
D63
R21
H24
Document Type: 
Working Paper

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