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Age-Based Property Tax Exemptions

Author

Listed:
  • H. Spencer Banzhaf
  • Ryan Mickey
  • Carlianne E. Patrick

Abstract

Many local jurisdictions offer property tax exemptions or similar concessions to older citizens. Such exemptions represent substantial intergenerational transfers and may have important implications for local public finances. The consequences of age-based property tax exemptions depend upon the extent to which they influence households' location decisions, housing tenure decisions, and housing consumption. We provide the first evidence on (long-term) changes in household composition and housing consumption attributable to local, age-based property tax exemptions. We construct a unique database of local property tax exemptions in Georgia covering 100 years of county, school district, and selected city property tax laws. We use these data to estimate the effect of age-based property tax exemptions on the number of older homeowners from 1970-2010 attributable to the exemption. Using a "quadruple-difference" estimation strategy, we find a significant increase in older homeowners attributable to the combined effect of age-based property tax exemptions on location decisions and housing tenure. We also find evidence that age-based property tax exemptions increase housing consumption among older households. Finally, we estimate a sorting model to estimate the equilibrium effects of different tax policies.

Suggested Citation

  • H. Spencer Banzhaf & Ryan Mickey & Carlianne E. Patrick, 2019. "Age-Based Property Tax Exemptions," NBER Working Papers 25468, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25468
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    2. Begley, Jaclene & Chan, Sewin, 2022. "Next to kin: How children influence the residential mobility decisions of older adults," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    3. Bigelow, Daniel P. & Kuethe, Todd, 2023. "The impact of preferential farmland taxation on local public finances," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    4. Tiemele Aristide Affroumou, 2025. "(Re)understanding the relationship between fiscal decentralization and property tax revenue: insights from developing and developed countries," Economic Change and Restructuring, Springer, vol. 58(3), pages 1-48, June.

    More about this item

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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