We analyse the welfare implications of property taxation. Using a sufficient statistics approach, we show that the tax incidence depends on how housing prices, labour 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.
Registration
Please register online before Wednesday 18:00 if you would like meet the speaker for a bilateral, or like to join for lunch or dinner.
Note that the dinner will take place on Sunday evening and not on Monday evening as usual.
