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Mathilde POULHES (CREST-INSEE) – “Increasing Housing Transfer Taxes: Buy Now or Foot the Bill Later"

November 20, 2018 @ 12:15 pm - 1:30 pm
The Microeconometrics Seminar: Every Tuesday at 12:15 pm.
Time: 12:15 pm – 1:30 pm
Date: 20th of November 2018
Place: Room 3001.
Mathilde POULHES (CREST-INSEE) – “Increasing Housing Transfer Taxes: Buy Now or Foot the Bill Later”.

Abstract: This paper estimates the impact of the rise of housing transfer tax in France. It exploits both time and geographical discontinuities in the implementation of the 2014 reform that allowed local authorities to raise housing transfer tax. On the short term, we provide evidence that buyers anticipate the reform to avoid the additional tax burden. We find some evidence of a long-term negative effect of the tax increase on the number of transactions, only in markets where supply is high relative to demand. Finally, we find no effect on pre-tax sales prices, meaning that the burden of the transfer tax rests on the buyer. Our findings highlight the price rigidity of the French housing market and suggest the existence of price frictions potentially due to loss aversion.

Organizers:
Laurent Davezies (CREST), Benoit Schmutz (CREST), Arne Uhlendorff (CREST) & Lucas Girard (CREST)
Sponsors:
CREST
Lunch registration:
food provided, no registration
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The Microeconometrics Seminar: Every Tuesday at 12:15 pm.
Time: 12:15 pm – 1:30 pm
Date: 20th of November 2018
Place: Room 3001.
Mathilde POULHES (CREST-INSEE) – “Increasing Housing Transfer Taxes: Buy Now or Foot the Bill Later”.

Abstract: This paper estimates the impact of the rise of housing transfer tax in France. It exploits both time and geographical discontinuities in the implementation of the 2014 reform that allowed local authorities to raise housing transfer tax. On the short term, we provide evidence that buyers anticipate the reform to avoid the additional tax burden. We find some evidence of a long-term negative effect of the tax increase on the number of transactions, only in markets where supply is high relative to demand. Finally, we find no effect on pre-tax sales prices, meaning that the burden of the transfer tax rests on the buyer. Our findings highlight the price rigidity of the French housing market and suggest the existence of price frictions potentially due to loss aversion.

Organizers:
Laurent Davezies (CREST), Benoit Schmutz (CREST), Arne Uhlendorff (CREST) & Lucas Girard (CREST)
Sponsors:
CREST
Lunch registration:
food provided, no registration
+ Google Calendar+ iCal Export