Exploring the impact of renovation subsidies on housing markets – evidence from the Swedish property market

IF 1.3 Q3 BUSINESS, FINANCE
Mats Wilhelmsson, Abukar Warsame
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Abstract

Purpose

The primary aim of this research is to examine the effects of the Renovation, Conversion, and Extension (ROT) tax deduction for renovations on the scope and quality of renovations and its subsequent impact on house prices across various Swedish municipalities.

Design/methodology/approach

This study utilises a two-way fixed effect instrument variable (IV) spatial Manski approach, analysing balanced panel data from 2004 to 2020 at the municipal level (290 municipalities) in Sweden. The methodology is designed to assess the impact of the ROT subsidy on the housing market.

Findings

The study reveals that the ROT subsidy has significantly influenced house prices, with noticeable variations between municipalities. These differences are attributed to the varying amounts of tax reductions for renovations and the extent to which property owners utilise these subsidies.

Research limitations/implications

The research is limited to the context of Sweden and may not be generalisable to other countries with different housing and subsidy policies. The findings are crucial for understanding the specific impacts of government subsidies on the housing market within this context.

Practical implications

For policymakers and stakeholders in the housing market, this study highlights the tangible effects of renovation subsidies on property values. It provides insights into how such financial incentives can shape the housing market dynamics.

Social implications

The research underscores the role of government policies in potentially influencing equitable access to housing. It suggests that subsidies like ROT can have broader social implications, including the distribution of housing benefits among different income groups and regions.

Originality/value

This study contributes original insights into the field of applied real estate economics by quantitatively analysing the impact of a specific government subsidy on the housing market. It offers a unique perspective on how fiscal policies can affect property values and renovation activities at the municipal level in Sweden.

探索翻新补贴对住房市场的影响--来自瑞典房地产市场的证据
本研究的主要目的是考察翻新、改建和扩建(ROT)税收减免对翻新范围和质量的影响,以及随后对瑞典各市房价的影响。本研究采用双向固定效应工具变量(IV)空间曼斯基方法,分析了 2004 年至 2020 年瑞典市级(290 个市)的平衡面板数据。该方法旨在评估 ROT 补贴对住房市场的影响。研究结果该研究揭示了 ROT 补贴对房价的显著影响,不同城市之间存在明显差异。这些差异可归因于不同的翻新减税额度以及房产所有者对这些补贴的利用程度。研究局限性/影响该研究仅限于瑞典的背景,可能无法推广到其他拥有不同住房和补贴政策的国家。对于住房市场的政策制定者和利益相关者而言,本研究强调了翻新补贴对房产价值的实际影响。社会影响这项研究强调了政府政策在潜在影响公平获得住房方面的作用。本研究通过定量分析特定政府补贴对住房市场的影响,为应用房地产经济学领域提供了独到见解。它提供了一个独特的视角,揭示了财政政策如何影响瑞典市政层面的房地产价值和翻新活动。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
3.10
自引率
7.70%
发文量
18
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