Impacts of property taxation on residential real estate development

Richard W. England, Min Qiang (Kent) Zhao and Ju-Chin Huang

Journal of Housing Economics, 2013, vol. 22, issue 1, 45-53

Abstract: Decisions about residential lot size and square footage are influenced by a variety of determinants ranging from zoning regulations to neighborhood characteristics. Our theoretical analysis suggests that the property tax rate could also affect residential lot sizes and the sizes of newly constructed houses. Using descriptions for over 36 thousand houses built in New Hampshire between 1985 and 2006, we find empirical evidence that higher property taxes are indeed associated with both smaller lots and smaller houses. On average, higher property tax rates are associated with more additional living space per newly developed acre. These effects are modest in magnitude, however.

Keywords: Property tax; Lot size; House size; Tax capitalization; Residential construction (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:22:y:2013:i:1:p:45-53

DOI: 10.1016/j.jhe.2012.11.002

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