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Owner-occupancy or home-ownership is a form of housing tenure in which a person, called the owner-occupier, owner-occupant, or home owner, owns the home in which they live.^[1] The home can be a house, such as a single-family house, an apartment, condominium, or a housing cooperative. In addition to providing housing, owner-occupancy also functions as a real estate investment.

Acquisition

Some homes are constructed by the owners with the intent to occupy. Many are inherited. A large number are purchased, as new homes from a real estate developer or as an existing home from a previous landlord or owner-occupier.

A house is usually the most expensive single purchase an individual or family makes, and often costs several times the annual household income. Given the high cost, most individuals do not have enough savings on hand to pay the entire amount outright. In developed countries, mortgage loans are available from financial institutions in return for interest. If the home owner fails to meet the agreed repayment schedule, a foreclosure (known as a repossession in some countries) may result.

Many countries offer aid to prospective homebuyers to make their purchases. These measures include grants, subsidized mortgages, and mortgage guarantees. Prospective homebuyers may have to meet certain qualifications to qualify for government aid, such as being a first-time homebuyer or having an income below a certain threshold.^[2]

Pros and cons

Home ownership gives occupants the right to modify the building and land as they please (subject to government, homeowner association, and deed restrictions), protects them from eviction, and creates a right to occupation which can be inherited. In some jurisdictions, it also confers certain legal rights with regard to abutters.

Houses and the land they sit on are expensive, and the combination of monthly mortgage, insurance, maintenance and repairs, and property tax payments are sometimes greater than monthly rental costs. Buildings may also gain and lose substantial value due to real estate market fluctuations, and selling a property can take a long time, depending on market conditions. This can make home ownership more constraining if the homeowner intends to move at a future date. Some home owners see their purchase as an investment and intend to sell or to rent the property after renovating or letting the house appreciate in value (known as flipping if done quickly).

Due to the fact that homeowners have a financial stake in their homes, being a homeowner is an economically efficient course of action. In order to improve their physical and mental well-being as well as their level of life satisfaction, they have a motivation to preserve or raise the value of their properties. Conversely, renters are incentivized to view local issues through a narrow lens, could be unmotivated to participate in civic life, and could see themselves as having little social utility.^[3] Compared to renters and absentee landlords, owner-occupiers are sometimes seen as more responsible toward property maintenance and community concerns, since they are more directly affected.^[4]

Traditionally, home ownership has been encouraged by governments in Western countries (especially English-speaking countries) because it was thought to help people acquire wealth, to encourage savings, and promote civic engagement. However, the housing market crash of 2008 in most of the English-speaking world has caused academic and policy-makers to question this logic.^[5]

Political influence

Owning a home influences how an individual views the role of government. Data from OECD countries shows that when housing prices rise, individuals are more critical of the welfare state. Conversely, when housing prices drop, homeowners are more likely to favor government intervention. In the US, areas with high rates of homeownership have higher levels of voter turnout. There is also a weak relationship between homeownership and supporting Republican candidates. Data from the UK supports the idea that homeowners view the value of their home as a kind of private, informal insurance policy against economic shocks. A sufficiently valuable home protects the owner without need for government intervention.^[6]

International statistics

Country	% Owner-Occupied Units in Urban Areas	Urban Population, % of Total
Argentina	67%	92%
Armenia	96%	64%
Australia	68%	89%
Azerbaijan	71%	52%
Brazil	74%	87%
Bulgaria	87%	73%
Canada	68%	81%
Chile	69%	89%
China	89%	45%
Colombia	50%	75%
Costa Rica	75%	94%
Czech Republic	47%	74%
Denmark	54%	87%
Egypt	37%	43%
France	47%	78%
Germany	43%	74%
Haiti	60%	48%
Hong Kong	53%	100%
Hungary	93%	68%
India	87%	30%
Indonesia	67%	54%
Italy	80%	68%
Kazakhstan	96%	-
Kenya	-	22%
Republic of Korea	56%	82%
Malawi	-	19%
Malaysia	-	72%
Mexico	71%	78%
Mongolia	-	58%
Morocco	62%	57%
Namibia	69%	35%
Netherlands	59%	83%
New Zealand	67%	87%
Nigeria	10%	50%
Norway	77%	78%
Pakistan	-	38%
Panama	66%	75%
Peru	-	72%
Philippines	80%	66%
Poland	78%	61%
Romania	97%	54%
Russia	81%	73%
Rwanda	-	19%
Senegal	-	43%
Singapore	87%	100%
South Africa	62%	62%
Spain	85%	77%
Sri Lanka	82%	15%
Sweden	41%	85%
Switzerland	40%	74%
Tanzania	-	26%
Thailand	75%	34%
Tunisia	78%	67%
Turkey	81%	70%
Uganda	-	13%
Ukraine	-	68%
United Kingdom	50%	90%
United States	65%	82%
Uruguay	59%	93%
Venezuela	83%	94%
Vietnam	-	28%
Zimbabwe	-	38%

Source: Housing Finance Information Network (HOFINET)^[7]

Costs of home ownership

Property tax

Homeowners are usually required to pay property tax (or millage tax) periodically. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state, a county or geographical region, or a municipality. Multiple jurisdictions may tax the same property.

Property Transfer Tax

In most Canadian provinces home purchasers must pay a one-time tax called a Property Transfer Tax (Land Transfer Tax) which is based on the cost of the home.