Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167524
Authors: 
Petkova, Kunka
Weichenrieder, Alfons
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6538
Abstract: 
This paper analyzes the tax effects of the German real estate transfer tax (RETT). While the vast majority of single-family houses in Germany are owner-occupied, apartments are usually held by private and incorporated investors. For this reason, we conducted a regression analysis to determine the effects of increasing RETT on the number and the prices of transactions separately for these two market segments. Our findings suggest that increasing the RETT by 1% is associated with a decline in transactions by 0.23% for single-family houses, but with no significant effect on the prices of traded houses. Conversely, for apartments, we find no significantly negative effects on the transactions, but the price effect of the RETT tends to be negative. Finally, for vacant lots, we find even larger quantity effects than for single-family houses suggesting roughly an elasticity of -1. The results for this specific market segment indicate that the government operates near the top of a Laffer curve.
Subjects: 
real estate transaction tax
stamp duty
housing market
taxation
financial transaction tax
JEL: 
H24
R21
Document Type: 
Working Paper

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