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The German real estate transfer tax: Evidence for single-family home transactions

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  • Fritzsche, Carolin
  • Vandrei, Lars

Abstract

This paper uses recent data for single-family home purchases to study the effects of the German real estate transfer tax. We aim to separate the tax's anticipatory effects from its lock-in effects on real estate transactions. The data indicate that an increase in the transfer tax is negatively correlated with the number of transactions that take place in the market for single-family homes. We estimate that an increase in the transfer tax produces enormous anticipation effects: 41% more transactions for the month just before and 42% fewer transactions just after. In addition, a one-percentage-point increase in the transfer tax yields approximately 7% fewer transactions due to the lock-in effect.

Suggested Citation

  • Fritzsche, Carolin & Vandrei, Lars, 2019. "The German real estate transfer tax: Evidence for single-family home transactions," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 131-143.
  • Handle: RePEc:eee:regeco:v:74:y:2019:i:c:p:131-143
    DOI: 10.1016/j.regsciurbeco.2018.08.005
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    More about this item

    Keywords

    Real estate transfer tax; Housing markets; Property taxation; Anticipation effects; Lock-in;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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