Conference Agenda

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).

Please note that all times are shown in the time zone of the conference. The current conference time is: 13th Aug 2022, 10:30:50am IST

 
 
Session Overview
Session
Real Estate Taxation
Time:
Thursday, 07/July/2022:
11:15am - 1:00pm

Session Chair: Christian A. L. Hilber, London School of Economics, United Kingdom
Location: Room B

Room in the Arts Building, Trinity College Dublin. Exact details to be confirmed by May 31

External Resource:
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Presentations

Beliefs about tax incidence: Do homeowners think beyond the statutory incidence?

Boogaerts, Thomas

KU Leuven, Belgium;

This paper elicits homeowners' beliefs about the incidence of the property transaction tax in Flanders. To this end, I explore a unique setting where homeowners can achieve eligibility for a reduction in the indirect transaction tax and the direct property tax by appealing the assessment of their property tax base. As such, this appeal behavior can function as a proxy for the efforts made by the homeowners to obtain these reductions. In 2018, the Flemish government decided to abolish the reduction in the transaction tax. This allows me to disentangle the effect caused by the two taxes separately. I find that homeowners are more likely to file an appeal against their property tax base if this can lead to a reduction in the transaction tax owed by future buyers of their property. This shows that these homeowners are thinking beyond the statutory incidence of this tax. Even more so, I show that these homeowners put more effort into reducing the indirect transaction tax than the direct property tax. As the transaction tax is less complex and more salient, I argue that these characteristics of the tax, instead of the statutory incidence, are the driving force behind the taxpayers' understanding.



Tobin Tax Policy, Housing Speculation, and Property Market Dynamics

Agarwal, Sumit1; Chau, Kwong Wing2; Hu, Maggie Rong3; Wan, Wayne Xinwei4

1National University of Singapore; 2The University of Hong Kong; 3The Chinese University of Hong Kong; 4University of Cambridge;

Hong Kong introduced a Tobin property tax—the Special Stamp Duty (SSD) Policy—in 2010, which substantially increased the selling costs of short-term property holders. This study examines the effectiveness of this Tobin property tax in curbing speculation and cooling down the market. We find that SSD effectively curtails short-term speculations and reduces flippers’ (holding period less than 2 years) market presence, which fell from 23.2% in 2009 to 2.4% in 2011 and 0.9% in 2013. However, 1 year after implementing the tax, the housing price shows an upward trend of 12.64% and 15.76% in the primary and secondary markets, respectively, indicating a lack of a market cooling effect. We show that flippers strategically defer sales to circumvent SSD charges, resulting in the sharp bunching of urgent sales immediately after the lock-in period ends. Further, SSD effectively increases selling costs and prolongs potential sellers’ holding periods, thereby significantly reducing liquidity and driving up prices in the secondary market. We also document an unintended externality on market dynamics: the unmet housing demand from the secondary market triggers a buying frenzy into the primary market, which increases the prices in both markets.



Tax Sales, Private Capital, and Gentrification in the U.S.

LaPoint, Cameron

Yale School of Management, United States of America;

Local governments recover missing revenues from overdue tax bills by auctioning off claims to homes in what is known as either a tax lien or tax deed sale. I construct a nationwide database of tax sales to examine how property tax delinquencies facilitate institutional real estate investment in major U.S. metro areas, and the effects of these acquisitions on neighborhood composition and housing disparities. I apply a two-stage reduced form model of population flows over 15-year periods to characterize migration across all U.S. Census tracts and show institutions target tax-distressed properties in gentrifying areas, while individuals are more likely to purchase liens in non-gentrifying areas. Using a newly created dataset containing 18,000 tax lien sales and overdue tax payment histories from Washington, D.C. as a case study, I find prices of homes neighboring a tax lien sale property decline within the first two years of the sale. Yet, positive pricing spillovers emerge within five years, driven by investors' conversion of former tax lien properties into luxury housing and commercial amenities. Private capital in the municipal finance ecosystem has amplified gentrification and the Black-white wealth gap.



 
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