House Prices and Immovable Property Tax: Evidence from OECD Countries

17 Pages Posted: 29 May 2020

See all articles by Tommaso Oliviero

Tommaso Oliviero

CSEF - University of Naples Federico II - Centre for Studies in Economics and Finance (CSEF)

Agnese Sacchi

Sapienza University of Rome

Annalisa Scognamiglio

CSEF; CSEF - University of Naples Federico II - Department of Economic and Statistical Sciences; Research Institute of Industrial Economics (IFN)

Alberto Zazzaro

affiliation not provided to SSRN

Date Written: November 2019

Abstract

This paper studies the impact of changes in immovable property tax revenues on the growth rate of house prices by analysing a panel of 34 OECD countries over the period 1970–2014. Starting from the annual series of immovable property tax revenues, we isolate years of significant shifts in the property tax regime and study their impact on house prices. We find a strong negative relationship between increases in immovable property tax revenues and house prices. This relationship is robust to the inclusion of cyclical determinants of house prices, country and year fixed effects, and country‐specific linear trends. We also propose an instrumental variable strategy based on countries’ legal origins that confirms a statistically significant negative impact of such taxes in the short run.

Keywords: asset pricing, fiscal policy, house prices, immovable property tax

Suggested Citation

Oliviero, Tommaso and Sacchi, Agnese and Scognamiglio, Annalisa and Zazzaro, Alberto, House Prices and Immovable Property Tax: Evidence from OECD Countries (November 2019). Metroeconomica, Vol. 70, Issue 4, pp. 776-792, 2019, Available at SSRN: https://ssrn.com/abstract=3613974 or http://dx.doi.org/10.1111/meca.12253

Tommaso Oliviero (Contact Author)

CSEF - University of Naples Federico II - Centre for Studies in Economics and Finance (CSEF) ( email )

Via Cintia
Complesso Monte S. Angelo
Naples, Naples 80126
Italy

Agnese Sacchi

Sapienza University of Rome ( email )

Via del Castro Laurenziano 9
Rome, Rome 00161
Italy

Annalisa Scognamiglio

CSEF ( email )

Via Cintia
Naples, 80126
Italy

CSEF - University of Naples Federico II - Department of Economic and Statistical Sciences ( email )

Via Cintia 26
Napoli
Italy

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Alberto Zazzaro

affiliation not provided to SSRN

No Address Available

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