Explainer: Do taxes on property cause high house prices? No

Cameron Murray
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Cameron Murray: The University of Sydney

No nv596, OSF Preprints from Center for Open Science

Abstract: Housing industry lobbyists in Australia and abroad often claim that property-related taxes comprise a large and growing share of the price of new housing and are hence pushing up the market price of new and existing dwellings. Land taxes, stamp duties on property transactions, GST on value-added investments, and other fees and charges are generally included in this analysis, as are many inferred price effects that are assumed to be due to regulations. This note explains four reasons why the claims of this tax summation approach are not valid. 1. Many of the included costs are not taxes on new housing. 2. Adding indirect taxes double counts. 3. Assumed price effects are implausible. 4. Taxes on property assets reduce market prices, not add to them.

Date: 2021-09-22
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:nv596

DOI: 10.31219/osf.io/nv596

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