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Heterogeneity in Income Tax Capitalization: Evidence from the Swiss Housing Market

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  • Mario Morger

    (Centre for Labour and Social Policy Studies BASS)

Abstract

Summary There is evidence that taxes capitalize into housing prices, but great uncertainty about the magnitude of income tax capitalization. One explanation why empirical evidence is unclear may stem from the fact that capitalization is something personal, depending on income, mobility, and on the individual tax burden of the bidding households. Therefore, income tax capitalization may theoretically differ substantially between different housing price segments. Results obtained from the analysis of a large Swiss dataset suggest that capitalization is lower for apartments for rent compared to apartments for sale. Capitalization is insignificant or less than 100% for all rental segments. Concerning apartments for sale, capitalization is well above 100% for the low and top price segments.

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  • Mario Morger, 2017. "Heterogeneity in Income Tax Capitalization: Evidence from the Swiss Housing Market," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(3), pages 227-259, July.
    • Handle: RePEc:spr:sjecst:v:153:y:2017:i:3:d:10.1007_bf03399508
    DOI: 10.1007/BF03399508
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    Cited by:

    1. Grodecka, Anna & Hull, Isaiah, 2019. "The Impact of Local Taxes and Public Services on Property Values," Working Paper Series 374, Sveriges Riksbank (Central Bank of Sweden).
    2. Joséphine Leuba, 2019. "Natural amenities and the spatial distribution of Swiss income," IRENE Working Papers 19-04, IRENE Institute of Economic Research.
    3. Isaiah Hull & Anna Grodecka-Messi, 2022. "Measuring the Impact of Taxes and Public Services on Property Values: A Double Machine Learning Approach," Papers 2203.14751, arXiv.org.

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    More about this item

    Keywords

    H22; H73; R21; R38;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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