Real Estate Prices and the Importance of Bequest Taxation
Giorgio Bellettini () and
No 107, Carlo Alberto Notebooks from Collegio Carlo Alberto
In the context of a general equilibrium model with overlapping generations and intergenerational altruism we show that, ceteris paribus, a decrease in taxes on inter vivos donations and bequests brings about an increase in real estate prices. This result has relevant policy implications. We test the predictions of our theory exploiting the abolition of bequest and donation taxation that took place in Italy in 2001. We implement this test by using an original and unique dataset on sales, donations and real estate prices for 13 italian cities between 1993 and 2004. Our estimates suggest that, controlling for other explanatory variables, the 2001 abolition of taxation on bequests and donations contributed substantially to the appreciation of Italian residential real estate.
Keywords: bequest tax; donations; real estate (search for similar items in EconPapers)
JEL-codes: E60 E65 H24 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2009, Revised 2011
New Economics Papers: this item is included in nep-dge, nep-mac, nep-pub and nep-ure
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Working Paper: Real Estate Prices and the Importance of Bequest Taxation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:107
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