Welfare Effects of Property Taxation

Max Löffler and Sebastian Siegloch

No 14195, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyze the welfare implications of property taxation. Using a sufficient statistics approach, we show that the tax incidence depends on how housing prices, labor and other types of incomes as well as public services respond to property tax changes. Empirically, we exploit the German institutional setting with 5,200 municipal tax reforms for identification. We find that higher taxes are fully passed on to rental prices after three years. The pass-through is lower when housing supply is inelastic. Combining reduced form estimates with our theoretical framework, we simulate the welfare effects of property taxes and show that they are regressive.

Keywords: property taxation; welfare; tax incidence; local labor markets; rental housing (search for similar items in EconPapers)
JEL-codes: H22 H41 H71 R13 R31 R38 (search for similar items in EconPapers)
Pages: 97 pages
Date: 2021-03
New Economics Papers: this item is included in nep-eur, nep-pbe, nep-pub and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://docs.iza.org/dp14195.pdf (application/pdf)

Related works:
Working Paper: Welfare Effects of Property Taxation (2024)
Working Paper: Welfare Effects of Property Taxation (2021)
Working Paper: Welfare Effects of Property Taxation (2021)
Working Paper: Welfare effects of property taxation (2021)
Working Paper: Property Taxation, Local Labor Markets and Rental Housing (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp14195

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().