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Assessing the impact of local taxation on property prices: a spatial matching contribution

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  • Sylvie Charlot
  • Sonia Paty
  • Michel Visalli

Abstract

This article provides empirical evidence on the impact of local taxation on property prices, controlling for the local public spending, using data on property taxation and real estate transactions, over the period 1994--2004. Our empirical methodology pairs transactions in the same spatial environments. Spatial differencing and Instrumental Variables (IV) methodology allow us to compare sales across municipality boundaries and to control for the potential endogeneity of local taxation and public spending. Our results suggest that the local Property Tax (PT) rate has no impact on property prices, while the amount of taxes paid appears to have a negative effect on property price.

Suggested Citation

  • Sylvie Charlot & Sonia Paty & Michel Visalli, 2013. "Assessing the impact of local taxation on property prices: a spatial matching contribution," Applied Economics, Taylor & Francis Journals, vol. 45(9), pages 1151-1166, March.
    • Handle: RePEc:taf:applec:45:y:2013:i:9:p:1151-1166
    DOI: 10.1080/00036846.2011.613798
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    2. Edward Feser, 2013. "Isserman’s Impact," International Regional Science Review, , vol. 36(1), pages 44-68, January.

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    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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