 Do local governments tax homeowner communities differently?Roland Füss, Oliver Lerbs and Alois Weigand Real Estate Economics, 2024, vol. 52, issue 2, 401-433 Abstract: This article investigates whether and how strongly the share of homeowners in a community affects residential property taxation by local governments. Different from renters, homeowners bear the full property tax burden, irrespective of local market conditions, and the tax is more salient to them. “Homeowner communities” may hence oppose high property taxes in order to protect their housing wealth. By merging granular spatial data from a complete housing inventory in the 2011 German Census with historical homeownership rates and housing damages during the Second World War as sources of exogenous variation in local homeownership, we provide empirical evidence that otherwise identical jurisdictions charge significantly lower property taxes when the share of homeowners in their population is higher. This result is invariant to local market conditions, which suggests tax salience is the key mechanism behind this effect. Moreover, we find positive spatial dependence on tax multipliers, indicative of property tax mimicking by local governments. Date: 2024 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:reesec:v:52:y:2024:i:2:p:401-433 Ordering information: This journal article can be ordered from Access Statistics for this article Real Estate Economics is currently edited by Crocker Liu, N. Edward Coulson and Walter Torous More articles in Real Estate Economics from American Real Estate and Urban Economics Association Contact information at EDIRC. |
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