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The effect of deed taxes on real estate prices in China

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  • Wenjing Li

    (University of Nebraska-Lincoln)

  • John E. Anderson

    (University of Nebraska-Lincoln)

  • James R. Schmidt

    (University of Nebraska-Lincoln)

Abstract

With rapidly accelerating real estate prices in China, the government has used changes in deed tax rates to affect demand. Tax rates have been increased for buyers of large or multiple homes to discourage speculative demand. We analyze the effects of deed tax rates on real estate prices over the period 2004–2013, estimating traditional dynamic models and dynamic spatial models. Results indicate that deed tax rate increases have a negative effect on pre-tax prices for both residential units and land use rights. Spatial spillover effects are also found in the residential market, with larger effects in the long term.

Suggested Citation

  • Wenjing Li & John E. Anderson & James R. Schmidt, 2020. "The effect of deed taxes on real estate prices in China," Asia-Pacific Journal of Regional Science, Springer, vol. 4(2), pages 317-341, June.
    • Handle: RePEc:spr:apjors:v:4:y:2020:i:2:d:10.1007_s41685-020-00147-7
    DOI: 10.1007/s41685-020-00147-7
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    References listed on IDEAS

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