Abstract

http://ssrn.com/abstract=48961
 
 

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Taxes and House Prices


Dennis R. Capozza


University of Michigan, Stephen M. Ross School of Business

Richard K. Green


University of Southern California - Lusk Center for Real Estate

Patric H. Hendershott


University of Aberdeen - Centre for Property Research; National Bureau of Economic Research (NBER)

December 1997

The Charles A. Dice Center Working Paper Series 97-16

Abstract:     
This research assesses the impact of income and property taxes on house prices using a decadal panel data set for 63 metropolitan areas from 1970 to 1990. Our evidence is consistent with full capitalization of marginal income tax rates into house prices. Full capitalization suggests that income tax changes have limited effects on the allocation of real capital among structure types, implying that past changes in the tax advantages have had little impact on home ownership and housing investment, in contrast to the conclusions of much of the existing literature. When we apply the results to some proposed tax changes, we compute substantial house price declines and wide geographic variation.

JEL Classification: H22, R38

working papers series


Not Available For Download

Date posted: December 23, 1997  

Suggested Citation

Capozza, Dennis R. and Green, Richard K. and Hendershott, Patric H., Taxes and House Prices (December 1997). The Charles A. Dice Center Working Paper Series 97-16. Available at SSRN: http://ssrn.com/abstract=48961

Contact Information

Dennis R. Capozza (Contact Author)
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-764-1269 (Phone)
734 629-0635 (Fax)
Richard K. Green
University of Southern California - Lusk Center for Real Estate ( email )
Los Angeles, CA 90089
United States
Patric H. Hendershott
University of Aberdeen - Centre for Property Research ( email )
Aberdeen AB24 2UF
Scotland
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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