Impact of real estate tax reform on the security market: Evidence from a synthetic control method

Nannan Yuan, Rujian Kong and Honghao Ren

Finance Research Letters, 2025, vol. 83, issue C

Abstract: This study exploits China’s 2011 real estate tax reform in Chongqing and Shanghai as quasi-natural experiments. Using the synthetic control method (SCM), we estimate the causal effects on securities trading volume and volatility. Main results show that securities’ trading volumes increase by 12.12 % in Chongqing, and 17.96 % in Shanghai relative to synthetic counterfactuals. Furthermore, Shanghai exhibited significantly higher securities market volatility following the property tax reform. The findings highlight heterogeneous market responses to localized real estate tax policies, with implications for policymakers targeting financial stability.

Keywords: Real estate tax reform; Trading volume of securities; Synthetic control method (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s154461232500875x

DOI: 10.1016/j.frl.2025.107616

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