Template-type: ReDIF-Paper 1.0
Author-Name: Nicole Aregger
Author-Name-First: Nicole
Author-Name-Last: Aregger
Author-Name: Martin Brown
Author-Name-First: Martin
Author-Name-Last: Brown
Author-Person: pbr129
Author-Name: Dr. Enzo Rossi
Author-Name-First: Enzo
Author-Name-Last: Rossi
Author-Person: pro820
Title: Transaction Taxes, Capital Gains Taxes and House Prices
Abstract: Motivated by the search for instruments to contain future housing bubbles, we examine the impact of transaction taxes and capital gains taxes on residential house price growth. We exploit the variation in taxation across Swiss cantons, as well as within-canton changes in taxation over time. We relate these taxes to house price growth observed for 92 regions of the country during the period 1985 - 2009. Our results suggest that higher taxes on capital gains exacerbate house price dynamics while transaction taxes have no impact on house price growth. These findings support the existence of a lock-in effect of capital gains taxes on housing supply. They further suggest that taxes on real estate capital gains and transaction values are not suitable measures to prevent excessive house price growth.
Length: 54 pages
Creation-Date: 2013
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2013/working_paper_2013_02
File-Format: text/html
Number: 2013-02
Classification-JEL: E32, H24, R21
Keywords: House prices, Transaction tax, Capital gains tax, Macroprudential policy
Handle: RePEc:snb:snbwpa:2013-02