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Taxing Property Transactions versus Taxing Property Ownership

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  • Terri A. Sexton

Abstract

Few studies have examined the use and effects of real property transfer taxes, especially in the U.S. This paper examines the variety of transfer tax programs currently in use in the U.S. and compares them to property taxes in terms of equity, efficiency, and revenue potential and stability. The next section examines the widespread use of property transfer taxes in the U.S. and other countries and compares them in terms of tax rates, tax base, tax authority, and use of revenues. In Section 3 we discuss the distributional impact of property transfer taxes including who ultimately bears the burden of the tax and whether the tax is regressive or progressive with respect to income. Section 4 looks at the efficiency effects of transfer taxes including the excess burden of the tax and its effect on household mobility. Section 5 examines the revenue potential of transfer taxes and their volatility, and Section 6 summarizes and concludes.

Suggested Citation

  • Terri A. Sexton, 2008. "Taxing Property Transactions versus Taxing Property Ownership," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0820, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper0820
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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp0820.pdf
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    References listed on IDEAS

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    1. O'Sullivan Arthur & Sexton Terri A. & Sheffrin Steven M., 1995. "Property Taxes, Mobility, and Home Ownership," Journal of Urban Economics, Elsevier, vol. 37(1), pages 107-129, January.
    2. O'Sullivan,Arthur & Sexton,Terri A. & Sheffrin,Steven M., 2007. "Property Taxes and Tax Revolts," Cambridge Books, Cambridge University Press, number 9780521035996, November.
    3. Benjamin, John D & Coulson, N Edward & Yang, Shiawee X, 1993. "Real Estate Transfer Taxes and Property Values: The Philadelphia Story," The Journal of Real Estate Finance and Economics, Springer, vol. 7(2), pages 151-157, September.
    4. Ferreira, Fernando, 2010. "You can take it with you: Proposition 13 tax benefits, residential mobility, and willingness to pay for housing amenities," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 661-673, October.
    5. Ana M. Aizcorbe & Arthur B. Kennickell & Kevin B. Moore, 2003. "Recent changes in U.S. family finances: evidence from the 1998 and 2001 Survey of Consumer Finances," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 89(Jan), pages 1-32, January.
    6. Roy Bahl, 2004. "Property Transfer Tax and Stamp Duty," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0427, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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