Housing and taxation in Spain: an empirical analysis

This paper analyzes the determinants of housing tenure choice and its relationship with the structure of Spanish income tax based on information from individual tax returns. We estimate the agent's housing-tenure decision, her probability of reaching the maximum statutory deductions and the income-tax savings derived from home ownership. Results show that the agent's income is significant on the tenure choice as well as other characteristics of the agent like her marital status and we conclude that the tax system affected the amount invested in housing.