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The German real estate transfer tax: Evidence for single-family home transactions

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  • Fritzsche, Carolin
  • Vandrei, Lars

Abstract

This paper uses recent data for single-family home purchases to study the effects of the German real estate transfer tax. We aim to separate the tax's anticipatory effects from its lock-in effects on real estate transactions. The data indicate that an increase in the transfer tax is negatively correlated with the number of transactions that take place in the market for single-family homes. We estimate that an increase in the transfer tax produces enormous anticipation effects: 41% more transactions for the month just before and 42% fewer transactions just after. In addition, a one-percentage-point increase in the transfer tax yields approximately 7% fewer transactions due to the lock-in effect.

Suggested Citation

  • Fritzsche, Carolin & Vandrei, Lars, 2019. "The German real estate transfer tax: Evidence for single-family home transactions," Munich Reprints in Economics 78276, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:78276
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    Citations

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    Cited by:

    1. Martin, Carolin & Schmitt, Noemi & Westerhoff, Frank, 2021. "Heterogeneous expectations, housing bubbles and tax policy," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 555-573.
    2. Clemens Fuest & Mathias Dolls & Carla Krolage & Florian Neumeier, 2019. "Who Bears the Burden of Real Estate Transfer Taxes? Evidence from the German Housing Market," ifo Working Paper Series 308, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    3. Daniel Jonas Schmidt, "undated". "Property transfer taxes, residential mobility, and welfare," Tinbergen Institute Discussion Papers 22-042/VI, Tinbergen Institute.
    4. Montalvo, José G. & Piolatto, Amedeo & Raya, Josep, 2020. "Transaction-tax evasion in the housing market," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    5. Bontemps, Christian & Cherbonnier, Frédéric & Magnac, Thierry, 2023. "Reducing transaction taxes on housing in highly regulated economies”," TSE Working Papers 23-1486, Toulouse School of Economics (TSE).
    6. Eerola, Essi & Harjunen, Oskari & Lyytikäinen, Teemu & Saarimaa, Tuukka, 2021. "Revisiting the effects of housing transfer taxes," Journal of Urban Economics, Elsevier, vol. 124(C).
    7. Muhammad Adil Rauf & Olaf Weber, 2022. "Housing Sustainability: The Effects of Speculation and Property Taxes on House Prices within and beyond the Jurisdiction," Sustainability, MDPI, vol. 14(12), pages 1-19, June.
    8. Essi Eerola & Oskari Harjunen & Teemu Lyytikäinen & Tuukka Saarimaa, 2019. "Effects of Housing Transfer Taxes on Household Mobility," CESifo Working Paper Series 7750, CESifo.
    9. Christofzik, Désirée I. & Feld, Lars P. & Yeter, Mustafa, 2020. "Heterogeneous price and quantity effects of the real estate transfer tax in Germany," Freiburg Discussion Papers on Constitutional Economics 20/10, Walter Eucken Institut e.V..
    10. Boysen-Hogrefe, Jens, 2023. "Zum Einfluss der Grunderwerbsteuer auf den Wohnungsneubau in Deutschland," Kiel Policy Brief 165, Kiel Institute for the World Economy (IfW Kiel).
    11. Manuela Krause & Niklas Potrafke, 2020. "The Real Estate Transfer Tax and Government Ideology: Evidence from the German States," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 76(1), pages 100-120.
    12. Daniel Borbely, 2021. "Limiting the distortionary effects of transaction taxes: Scottish stamp duty after the Mirrlees Review," Fiscal Studies, John Wiley & Sons, vol. 42(2), pages 265-290, June.
    13. Koetter, Michael & Marek, Philipp & Mavropoulos, Antonios, 2021. "Real estate transaction taxes and credit supply," Discussion Papers 04/2021, Deutsche Bundesbank.
    14. Salvador Barrios & Cecile Denis & Viginta Ivaskaite-Tamosiune & Adriana Reut & Estefania Vazquez Torres, 2019. "Housing taxation: a new database for Europe," JRC Working Papers on Taxation & Structural Reforms 2019-08, Joint Research Centre.
    15. Elisabeth Arnold & Katharina Falkner & Margit Schratzenstaller & Franz Sinabell, 2023. "Auswirkungen des Flächenverbrauchs für die Versorgungssicherheit und steuerliche Instrumente zu dessen Eindämmung," WIFO Studies, WIFO, number 71122.
    16. Milyausha R. Pinskaya & Rodion V. Balakin, 2023. "Fiscal Implications of a Complete Conversion to Taxation of Property of Organizations in Russia on the Basis of Cadastral Value," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(4), pages 834-860.

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