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The impact of enterprise zone tax incentives on local property markets in England: who actually benefits?

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  • Shaun A. Bond
  • Ben Gardiner
  • Peter Tyler

Abstract

Research on the impact of property taxes on local real estate markets has a long history in the urban economics literature but few studies have considered this issue in the context of the commercial real estate market or on data from outside the USA. This is surprising given the use which governments make of property tax exemptions to assist local regeneration with the UK Government recently announcing some 24 new enterprise zones (EZs) in England. In this study we use a novel data-set on commercial real estate leases to investigate the incidence of the local property tax savings. Our data-set covers both taxed and tax exempt areas during the operation of the EZ designations in the UK. Our findings show that a large part of the tax savings appears to be captured in higher rents charged by landlords.

Suggested Citation

  • Shaun A. Bond & Ben Gardiner & Peter Tyler, 2013. "The impact of enterprise zone tax incentives on local property markets in England: who actually benefits?," Journal of Property Research, Taylor & Francis Journals, vol. 30(1), pages 67-85, March.
    • Handle: RePEc:taf:jpropr:v:30:y:2013:i:1:p:67-85
    DOI: 10.1080/09599916.2012.721381
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    References listed on IDEAS

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    1. Matias Busso & Patrick Kline, 2008. "Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program," Cowles Foundation Discussion Papers 1639, Cowles Foundation for Research in Economics, Yale University.
    2. Hilber, Christian A. L., 2011. "The economics implications of house price capitalization a survey of an emerging literature," LSE Research Online Documents on Economics 58596, London School of Economics and Political Science, LSE Library.
    3. Bondonio, Daniele, 2002. "Evaluating the Employment Impact of Business Incentive Programs in EU Disadvantaged Areas. A case from Northern Italy," POLIS Working Papers 27, Institute of Public Policy and Public Choice - POLIS.
    4. Hanson, Andrew, 2009. "Local employment, poverty, and property value effects of geographically-targeted tax incentives: An instrumental variables approach," Regional Science and Urban Economics, Elsevier, vol. 39(6), pages 721-731, November.
    5. Krupka, Douglas J. & Noonan, Douglas S., 2009. "Neighborhood Dynamics and the Housing Price Effects of Spatially Targeted Economic Development Policy," IZA Discussion Papers 4308, Institute of Labor Economics (IZA).
    6. David Stadelmann & Steve Billon, 2015. "Capitalization of fiscal variables persists over time," Papers in Regional Science, Wiley Blackwell, vol. 94(2), pages 347-363, June.
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    1. Business rates and the Scottish economy
      by Brian Ashcroft in Scottish Economy Watch on 2015-11-12 19:51:58

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    Cited by:

    1. Matthew Gobey & Karolis Matikonis, 2021. "Small business property tax reductions and job growth," Small Business Economics, Springer, vol. 56(1), pages 277-292, January.
    2. Nidhi Chaudhary & Jonathan Potter, 2019. "Evaluation of the local employment impacts of enterprise zones: A critique," Urban Studies, Urban Studies Journal Limited, vol. 56(10), pages 2112-2159, August.
    3. M. Poulhès, 2015. "Are Enterprise Zones Benefits Capitalized into Commercial Property Values? The French case," Documents de Travail de l'Insee - INSEE Working Papers g2015-13, Institut National de la Statistique et des Etudes Economiques.

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