The Connection Between House Price Appreciation and Property Tax Revenues
By Byron Lutz. National tax journal, 2008
110 citations recorded by the source corpus.
This paper explores two aspects of the connection between property tax revenues and house prices. First, I estimate the elasticity of property tax revenues with respect to house prices. This elasticity does not necessarily equal one as governments may adjust effective tax rates to offset changes in property values. Second, I examine the timing of the relationship. Institutional features of the property tax make it unlikely that changes in house prices will immediately influence tax revenues. The results suggest that the elasticity eventually equals 0.4 and that it takes three years for house price changes to impact tax revenues.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/80d980c5445b8e5e164848335cf152b3c180527b
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In Economics and Econometrics
- Robert D. Buschman
- Mine Zeynep Senses
- Leo Feler
- D. Sjoquist
- James Alm
- G. Mascagni
- E. Kirchler
- Stephan Muehlbacher
Citations in the corpus
- Trade Shocks and the Provision of Local Public Goods (2017, background): “Lutz (2008) reports that policy makers offset about 60 percent of house price changes by adjusting the effective tax rate.”
- Rethinking local government reliance on the property tax (2011, background): “Like Lutz (2008), they conclude that these asymmetric responses are due largely to lags between changes (positive or negative) in market prices and assessed values, to caps on assessment increases, and to decreases in millage rates in response to increases in home prices.”