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The Impact of the ‘Scellier’ Income Tax Relief on Building Land Prices in France

Author

Listed:
  • Pierre-Henri Bono

    (CEVIPOF - Centre de recherches politiques de Sciences Po (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Alain Trannoy

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

This study assesses the impact of a tax incentive scheme to boost private rental investment in force in France from 2009 to 2012, called the "Scellier scheme" (after the name of the minister who promoted it), on changes in the price of building land. A difference in differences estimation is implemented, drawing on data from the BNDP database covering the period 2004 2010. The definition of the control and treatment groups is based on the boundary between municipalities which are eligible for the Scellier scheme and municipalities which are not. The estimation results suggest that the scheme had an inflationary effect and point to land price capitalisation, with an increase in the price per square metre of around 7 euros in the first year and of 8 to 9 euros over 2009 and 2010, without a significant rise of the phenome¬non in the second year, i.e. an increase of 8% in the first year and of 9 to 10% after two years. The regions where the market was the tightest saw the most rapid price increase, particularly the Mediterranean region.

Suggested Citation

  • Pierre-Henri Bono & Alain Trannoy, 2019. "The Impact of the ‘Scellier’ Income Tax Relief on Building Land Prices in France," Post-Print hal-02481755, HAL.
    • Handle: RePEc:hal:journl:hal-02481755
    DOI: 10.24187/ecostat.2019.507d.1976
    Note: View the original document on HAL open archive server: https://amu.hal.science/hal-02481755
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    Cited by:

    1. Guillaume Chapelle & J.B. Eyméoud & C. Wolf, 2023. "Land-use regulation and housing supply elasticity: evidence from France," THEMA Working Papers 2023-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.

    More about this item

    Keywords

    land price; income tax deduction; private rental investment; Scellier scheme;
    All these keywords.

    JEL classification:

    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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