• Land and Housing Review
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• v.15 no.4
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• pp.111-124
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• 2024

Using the National Survey of Tax and Benefit from 2008 to 2021, this study examines the effects of special deduction for housing funds (debt service payment of housing rental loans and long-term mortgage interests) and tax credits for monthly rent on home ownership of salaried workers without homeownership. The results indicate that, others being constant, households in metropolitan areas exhibit a lower probability of homeownership compared to non-metropolitan counterparts, with this probability rising as household size increases. Among housing types, apartments show the highest homeownership likelihood, followed by townhouses and single-family homes. The two special income deduction schemes reduce the user cost of homeownership through price and wealth effects, facilitated by housing fund accumulation, thereby enhancing homeownership probability. Conversely, tax credits for monthly rent reduce homeownership likelihood via price effects. These findings suggest that income deductions and rent tax credits exert distinct and contrasting influences on home purchase decisions.