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Does inheritance taxation reform promote to build inexpensive rental housing?

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  • Mikawa, Naoto
  • Yasuda, Shohei
  • Yukutake, Norifumi

Abstract

The inheritance taxation reform of 2015 in Japan substantially increased the amount of tax levied on large inheritances. This potentially served as a good incentive for people to build inexpensive low-rise apartments for tax savings, which increased the number of low-cost apartments. Therefore, this study investigates the effect of inheritance taxation reform on housing rents. Using the difference-in-differences method, we reveal that the inheritance taxation reform decreased the housing rents of wooden or light steel-framed apartments by 1.3%. Moreover, our results indicate that while the rental of slightly older housings belonging to the treatment group decreased, the rental of new housing belonging to the treatment group did not change.

Suggested Citation

  • Mikawa, Naoto & Yasuda, Shohei & Yukutake, Norifumi, 2023. "Does inheritance taxation reform promote to build inexpensive rental housing?," Journal of the Japanese and International Economies, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:jjieco:v:68:y:2023:i:c:s0889158323000102
    DOI: 10.1016/j.jjie.2023.101255
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    More about this item

    Keywords

    Inheritance tax; Building structure; Rental housing market; Japan;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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