House Prices

have published a very good report on house prices. I quote one section:

Like other businesses, a rental property investor can combine their net rental income with income from other sources. An investor's total deductions for interest, , repairs and may exceed the gross income from rent, creating a loss that can be applied to reduce the taxpayer's liability on other sources of income. The value of this aspect of the system is directly related to marginal . Therefore, the increase in 2000 to a marginal tax rate of 39% may have encouraged some additional investment in rental housing.

So Labour increasing the top marginal tax rate increased demand for investment properties, pushing up. And one presumes that a reduction in marginal tax rates would make investment properties less desirable and lead to a drop (or less of an increase) in house prices.

Comments (38)

Login to comment or vote

Add a Comment