Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229202
Authors: 
Christofzik, Désirée I.
Feld, Lars P.
Yeter, Mustafa
Year of Publication: 
2020
Series/Report no.: 
Freiburger Diskussionspapiere zur Ordnungsökonomik No. 20/10
Abstract: 
Using quarterly data for German counties, we study how housing prices and offers respond to higher transaction costs induced by tax increases. Since 2006, states can set their own tax rates on real estate transfers. Several and substantial tax hikes generate variation across time and states which we exploit in our empirical analysis using an event study design. Our results indicate that prices and offers decrease significantly by 3% and 6% already in the quarter in which the tax increase is announced in press but rise subsequently. Furthermore, we find heterogeneous responses when distinguishing between different types of counties. Housing prices decrease persistently in shrinking counties, while this is at most temporarily the case in growing, central and peripheral counties. This implies that the economic incidence of this tax varies across transactions.
Subjects: 
Real estate transfer tax
real estate prices
housing market
tax incidence
anticipation effects
JEL: 
H20
H22
H71
R32
R38
Document Type: 
Working Paper

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