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Property tax and property values: Evidence from the 2012 Italian tax reform
- Source :
- European Economic Review. 118:227-251
- Publication Year :
- 2019
- Publisher :
- Elsevier BV, 2019.
-
Abstract
- This paper assesses the extent to which property taxes are capitalized into property values, exploiting the 2012 Italian tax reform. Municipal-level variation in the level of the property tax rates is instrumented using the exogenous staggered timing of local elections. We show that the incumbent local governments with upcoming elections in 2013 shifted the composition of fiscal revenues towards lower property tax. Our 2SLS estimate shows that a one standard deviation increase in municipal-level property tax intensity leads to a 2.7% reduction of municipal property values in the year of the reform. We elicit information on the characteristics of the compliers and show that these municipalities feature inefficient public spending and low social capital.
- Subjects :
- Economics and Econometrics
Property tax
Property (philosophy)
05 social sciences
Monetary economics
Tax reform
Public spending
Property value
0502 economics and business
Economics
Political budget cycle
Revenue
Property tax capitalization
050207 economics
Finance
Real estate values
050205 econometrics
Social capital
Subjects
Details
- ISSN :
- 00142921
- Volume :
- 118
- Database :
- OpenAIRE
- Journal :
- European Economic Review
- Accession number :
- edsair.doi.dedup.....521606cfb7d553b6c4287806224a75e6
- Full Text :
- https://doi.org/10.1016/j.euroecorev.2019.05.015