The Effects of Changes in Capital Gains Taxes on Land Sales: Empirical Evidence from Finland
AbstractWe estimate the landowner response to and fiscal effects of a temporary reduction in capital gains taxes imposed on land sales. The underlying normative decision rules are first derived and solved numerically using stochastic dynamic programming. The landowner preferences and willingness to sell land are then estimated in the reduced form using survey data from Finland. The results suggest that the timing of land sales and land sales quantities respond significantly to tax incentives. Certain temporary tax waiver programs could maintain the current tax revenues with fewer trade distorting effects on the land market.
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Bibliographic InfoArticle provided by University of Wisconsin Press in its journal Land Economics.
Volume (Year): 87 (2011)
Issue (Month): 4 ()
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Web page: http://le.uwpress.org/
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
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- Myyrä, Sami, & Pietola, Kyosti & Heikkilä, Anna-Maija, 2011. "Farm Level Capital: Capital positions, structures, the dynamics of farm level investments, capital accumulation and leverage positions," Factor Markets Working Papers 105, Centre for European Policy Studies.
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