Real Estate Prices and the Importance of Bequest Taxation
AbstractIn the context of a general equilibrium model with overlapping generations and intergenerational altruism we show that, ceteris paribus, a decrease in taxes on inter vivos donations and bequests brings about an increase in real estate prices. This result has relevant policy implications. We test the predictions of our theory exploiting the abolition of bequest and donation taxation that took place in Italy in 2001. We implement this test by using an original and unique dataset on sales, donations and real estate prices for 13 italian cities between 1993 and 2004. Our estimates suggest that, controlling for other explanatory variables, the 2001 abolition of taxation on bequests and donations contributed substantially to the appreciation of Italian residential real estate.
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Bibliographic InfoPaper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 107.
Length: 40 pages
Date of creation: 2009
Date of revision: 2011
bequest tax; donations; real estate;
Other versions of this item:
- Giorgio Bellettini & Filippo Taddei, 2009. "Real Estate Prices and the Importance of Bequest Taxation," CESifo Working Paper Series 2577, CESifo Group Munich.
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-28 (All new papers)
- NEP-DGE-2009-03-28 (Dynamic General Equilibrium)
- NEP-MAC-2009-03-28 (Macroeconomics)
- NEP-PUB-2009-03-28 (Public Finance)
- NEP-URE-2009-03-28 (Urban & Real Estate Economics)
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