The connection between house price appreciation and property tax revenues

Byron F. Lutz
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Byron F. Lutz: https://www.federalreserve.gov/econres/byron-lutz.htm

No 2008-48, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper explores two aspects of the connection between property tax revenues and house prices. First, I estimate the elasticity of property tax revenues with respect to house prices. This elasticity does not necessarily equal one as governments may adjust effective tax rates to offset changes in property values. Second, I examine the timing of the relationship. Institutional features of the property tax make it unlikely that changes in house prices will immediately influence tax revenues. The results suggest that the elasticity eventually equals 0.4 and that it takes three years for house price changes to impact tax revenues.

Keywords: Housing - Prices; Property tax (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (36)

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