Do local governments tax homeowner communities differently?


Füss, Roland ; Lerbs, Oliver W.


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URL: https://ub-madoc.bib.uni-mannheim.de/43565
URN: urn:nbn:de:bsz:180-madoc-435656
Document Type: Working paper
Year of publication: 2017
The title of a journal, publication series: ZEW Discussion Papers
Volume: 17-036
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D72 , H20 , H31 , H71 , R31,
Keywords (English): Homeownership , public financing , residential property tax , spatial tax mimicking , yardstick competition
Abstract: This paper investigates whether and how strongly the share of homeowners in a community affects residential property taxation by local governments. Different from renters, homeowners bear the full property tax burden irrespective of local market conditions, and the tax is more salient to them. "Homeowner communities" may hence oppose high property taxes in order to protect their housing wealth. Using granular spatial data from a complete housing inventory in the 2011 German Census and historical war damages as a source of exogenous variation in local homeownership, we provide empirical evidence that otherwise identical jurisdictions charge significantly lower property taxes when the share of homeowners in their population is higher. This result is invariant to local market conditions, which suggests tax salience as the key mechanism behind this effect. We find positive spatial dependence in tax multipliers, indicative of property tax mimicking by local governments.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Füss, Roland ; Lerbs, Oliver W. (2017) Do local governments tax homeowner communities differently? Open Access ZEW Discussion Papers Mannheim 17-036 [Working paper]
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