An overview of the taxation of residential property: is it a good idea?

Marta Rodriguez-Vives () and Miguel Angel Gavilan-Rubio ()
Additional contact information
Marta Rodriguez-Vives: Principal Economist at Fiscal Policies Division, European Central Bank, Frankfurt am Main, Germany
Miguel Angel Gavilan-Rubio: Researcher at Analysis and Research Division, Bank of Slovenia, Ljubljana, Slovenia

Public Sector Economics, 2021, vol. 45, issue 2, 283-303

Abstract: This article examines the taxation of property in the residential market as a potential revenue-raising tool in public finance. Economists generally consider taxing property to be less distortionary than taxing other tax bases. It ranks well in terms of trade-offs across long-term growth and inequality considerations. Although countries have different societal preferences, recourse to property taxation is not generally widespread. Using panel data methods and stochastic frontier analysis, we provide evidence that government revenue from property taxation is relatively inelastic to house price and quantity developments, and that countries with a higher implicit tax rate tend to be more efficient at collecting the revenue. Despite the increase of prices since 2014, low revenues can be the result of low effective tax rates and outdated house valuation systems.

Keywords: property tax; households; housing policies; housing prices; wealth inequality (search for similar items in EconPapers)
JEL-codes: H21 H24 H71 R31 R38 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.pse-journal.hr/upload/files/pse/2021/2/5.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ipf:psejou:v:45:y:2021:i:2:p:283-303

DOI: 10.3326/pse.45.2.5

Access Statistics for this article

More articles in Public Sector Economics from Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Martina Fabris ().