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Do political parties matter for property taxes?

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  • Felipe Aldunate
  • Cristobal Diaz
  • Santiago Truffa

Abstract

We evaluate whether political partisanship affects local taxes in an emerging economy. Using detailed residential property-level data in Chile, we study whether mayors’ political leanings affect the reassessment process and thus the taxes paid by home owners. In Chile, this type of tax is especially relevant since it is one of the largest sources of municipal income. To address endogeneity concerns, we use a regression discontinuity design, exploiting the quasi-experimental variation provided by close municipal elections. Our main results show that after a right-wing mayor is elected, property assessments increase up to 31% more than in a similar municipality where a left-wing mayor was elected. This effect cannot be fully explained by changes in prices or property characteristics.

Suggested Citation

  • Felipe Aldunate & Cristobal Diaz & Santiago Truffa, 2025. "Do political parties matter for property taxes?," PLOS ONE, Public Library of Science, vol. 20(5), pages 1-29, May.
    • Handle: RePEc:plo:pone00:0319994
    DOI: 10.1371/journal.pone.0319994
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