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Assessing the impact of local taxation on property prices: a spatial matching contribution / Evaluer l'impact de la fiscalité locale sur les prix immobiliers : une contribution de l'appariement spatial

Author

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  • Sylvie Charlot
  • Sonia Paty
  • Michel Visalli

Abstract

This paper provides empirical evidence on the impact of local taxation on property prices in an urban French context, using data on property taxation and real estate transactions, over the period 1994-2004. Our empirical methodology pairs transactions in the same spatial environments to estimate the impact of property taxation, controlling for the local public spending effect. Spatial differencing and Instrumental Variables methodology allow us to compare sales across municipality boundaries and to control for the potential endogeneity of local taxation and public spending. Our results suggest that the local property tax rate has no impact on property prices, while the amount of taxes paid appears to have a negative effect on property price. - Ce papier contribue à comprendre l'impact de la fiscalité locale sur les prix d'achat des maisons dans un contexte urbain et français, à l'aide de données sur la fiscalité locale sur les transactions immobilières réalisées sur la période 1994-2004. Notre méthodologie apparie les transactions ayant eu lieu dans le même environnement spatial afin d'estimer l'effet de la taxe foncière en contrôlant les effets des dépenses publiques locales. La différenciation spatiale ainsi que la méthode des variables instrumentales nous permettent de comparer les ventes de part et d'autre des frontières communales et de contrôler l'endogénéité potentielle de la fiscalité et des dépenses publiques locales. Nos résultats tendent à montrer que le taux de taxe foncière n'a pas d'impact sur les prix d'achat, alors que le montant de taxe acquitté par les propriétaires semble avoir un effet négatif sur les prix des transaction foncières.

Suggested Citation

  • Sylvie Charlot & Sonia Paty & Michel Visalli, 2008. "Assessing the impact of local taxation on property prices: a spatial matching contribution / Evaluer l'impact de la fiscalité locale sur les prix immobiliers : une contribution de l'appariement spatia," INRA UMR CESAER Working Papers 2008/3, INRA UMR CESAER, Centre d'’Economie et Sociologie appliquées à l'’Agriculture et aux Espaces Ruraux.
    • Handle: RePEc:ceo:wpaper:18
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal capitalization; Local taxation; Property prices; Borders / Capitalisation fiscale; Fscalité locale; Prix des transactions foncières; Effets frontières;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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