Untaxed imputed rent is America’s largest unobtrusive housing subsidy

Evidence

12. IRC §164. The 2017 Tax Cuts and Jobs Act limited the deduction of state and local income taxes and real property taxes to a maximum combined amount of 10,000. (The limit is the same for singles and married couples.) There is one other rather obscure tax subsidy for homeownership. Homeowners do not get taxed on the fair rental value of their homes, similar to when stay-at-home spouses provide tax-free services to their families. The technical tax term is “imputed income.” The theory is if you were not living in your home, you would rent it out and have to include the rent received from your tenant in your income. By living in your own home, you are escaping taxation on that amount. Imputed income is not taxed in the United States, although it is taxed in other countries (Belgium, Finland, Denmark, Germany, and Sweden, to name a few). The most recent estimate from the Obama administration was a projected revenue loss of 96 billion for 2020. — Dorothy A. Brown, Getting to Reparations, 1315

Categorization

• XREF: Connects to the broader tax-subsidy-for-homeownership critique (mortgage interest deduction being race-neutral in form, raced in effect) that Brown develops; also echoes the stay-at-home-spouse imputed-income point familiar from tax scholarship.
• SEED: Possible essay angle: the $96B untaxed imputed rent subsidy and other ‘obscure’ subsidies that benefit homeowners far more than the celebrated mortgage interest deduction — who actually captures this one?