VOLUME XII
AUTUMN 2004
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VOLUME XII
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AUTUMN 2004
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COMPENSATING SCHEME FOR THE LOSS OF INCENTIVES IN THE PURCHASE OF A PERMANENT DWELLING IN THE PERSONAL INCOME TAX REFORM OF 1999
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JORGE ONRUBIA FERNÁNDEZ
JOSÉ FÉLIX SANZ SANZ Instituto de Estudios Fiscales y Universidad Complutense de Madrid DESIDERIO ROMERO JORDÁN Instituto de Estudios Fiscales y Universidad Rey Juan Carlos |
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A compensating scheme aimed at offsetting a loss of incentive for buying a permanent dwelling has been introduced in the Income Tax Reform (Act 40/1998). Such law defines “a theoretical incentive” granted to a taxpayer by the previous regulations and compensates him for possible negative effects. This compensating scheme is dealt with through the concept of “marginal tax saving”. In the light of the findings, a possible change in this scheme is proposed. Finally, from a tax planning view, we consider the option of an early repayment of the loan that finances the purchase of the dwelling.
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Key words: tax incentives, permanent dwelling, marginal tax saving, personal income tax, housing.
JEL classification: H22, H24, H31. |
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