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Property Tax Reform and Land Use: Evidence from Japan

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  • Tomomi Miyazaki

    (Graduate School of Economics, Kobe University)

  • Motohiro Sato

    (Graduate School of Economics, Hitotsubashi University)

Abstract

It is often said that farmland conservation in urban areas (i.e., cities and inner suburbs) is not desirable because it hinders converting farmland into residential areas, thereby deterring urbanization. If the preferential treatment of property taxes on farmland is rectified, these problems can be solved. In this paper, we study two property tax preferential treatment reforms that took place in Japan during the 1990s. We examine the effects of these reforms by theoretical and empirical investigation. The econometric results are consistent with our theoretic model’s main predictions; the proportion of farmland in the major cities in the three metropolitan areas (Tokyo, Chubu, and Kansai) decreased following the reforms. However, since landlords did not replace all the farmland with housing lots, the problem of obstructed urbanization remains to be solved.

Suggested Citation

  • Tomomi Miyazaki & Motohiro Sato, 2019. "Property Tax Reform and Land Use: Evidence from Japan," Working Papers 181905, University of California-Irvine, Department of Economics.
    • Handle: RePEc:irv:wpaper:181905
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    File URL: https://www.economics.uci.edu/research/wp/1819/18-19-05.pdf
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    More about this item

    Keywords

    Property tax; Land use in urban area; preferential treatment on farmland; urbanization;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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