Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market

By W. Kopczuk. 2014

143 citations recorded by the source corpus.

Using discontinuities in housing transaction taxes in New York and New Jersey we find robust price bunching. Incidence for transactions local to the notch falls on sellers, with no evidence of evasion. The volume of missing transactions above the notch exceeds those bunching (beyond the usual extensive-margin response), indicating incentives for buyers and sellers not to transact (market unravels). The possibility of unraveling affects interpretation and estimation of bunching. Away from the threshold, we find increased discounts and weaker relationship between listing and sale prices. Equilibrium bargaining framework highlights that taxation affects the ultimate allocation in this search market. (JEL H71, R21, R31)

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/6d6f6859ec15dbb6038180e19289c861e23214af

Citations in the corpus

• Causal Inference in Urban and Regional Economics (2014, unknown): “Recent applications of this approach to housing markets include Best and Kleven (2014), Kopczuk and Munroe (2014), and De Fusco and Paciorek (2014).”