Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232050
Authors: 
Löffler, Max
Siegloch, Sebastian
Year of Publication: 
2021
Series/Report no.: 
ZEW Discussion Papers No. 21-026
Abstract: 
We analyze the welfare implications of property taxation. Using a sufficient statistics approach, we show that the tax incidence depends on how housing prices, labor and other types of incomes as well as public services respond to property tax changes. Empirically, we exploit the German institutional setting with 5,200 municipal tax reforms for identification. We find that higher taxes are fully passed on to rental prices after three years. The pass-through is lower when housing supply is inelastic. Combining reduced form estimates with our theoretical framework, we simulate the welfare effects of property taxes and show that they are regressive.
Subjects: 
property taxation
welfare
tax incidence
local labor markets
rental housing
JEL: 
H22
H41
H71
R13
R31
R38
Document Type: 
Working Paper

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