Housing Wealth Concentration and Redistributive Impact of Property Tax: Evidence from a Database on French Households’ Housing Wealth[Et pour quelques appartements de plus : Étude de la propriété immobilière des ménages et du profil redistributif de la taxe foncière]

Research on housing wealth and housing taxation has long been hindered by the lack of well-suited data linking housing units and households. This study makes a major step towards filling this gap by introducing a new exhaustive database on French households' housing wealth. This study makes three different contributions to the literature. The first contribution consists in describing in detail the methodology used to construct the database. by systematically combining administrative data (cadastral data, fiscal and social data on income, data on households, real estate transactions data and private companies ownership data). This database involves a detailed description of households (composition, income, place of residence) and their housing wealth. Second, this study analyzes the concentration of housing ownership, with a focus on dwellings owned by multiple households. The average number of dwellings owned by households increases with their standard of living, from less than 1 dwelling per household in the bottom 50 percent to 2.4 dwellings in the top 10% and 4 dwellings in the top 1%. While the first two dwellings owned by households are almost systematically used as primary or secondary residences, the next dwellings are most often rental investments. Rental dwellings differ from other dwellings in two respects: they are more often owned through a real estate non-trading company (société civile immobilière) and are highly concentrated: households owning at least five dwellings account for 3.5 percent of households, but own 50 percent of all rental dwellings owned by natural persons. Third, this study analyses the redistributive effects of the property tax on households' housing wealth. The weight of property tax expressed as an average share in disposable income increases with the households' standard of living, except for the lowest and highest percentiles of the distribution. This result reflects, among other things, the fact that home ownership increases with the standard of living. However, when restricting the analysis to taxable households (those owning at least one dwelling), the weight of property tax decreases with the standard of living in the first third of the distribution, remains flat until the top 5% and decreases again in the top of the distribution. Finally, from a geographical point of view, the weight of property tax varies significantly between regions - rather low in the east and west of France, and high around the Mediterranean - and even more markedly within regions: in the greater Paris region (Île-de France), it is much lower in richer areas (Paris and Hauts- de-Seine) than in poorer ones (Seine-Saint-Denis).