Heterogeneous price and quantity effects of the real estate transfer tax in Germany

Neues Diskussionspapier von Lars P. Feld, Désirée Christofzik und Mustafa Yeter: Using quarterly data for German counties, we study how housing prices and offersrespond to higher transaction costs induced by tax increases. Since 2006,statescan set their own tax rates on real estate transfers. Several and substantial taxhikes generate variation across time and states which we exploit in our empiricalanalysis using an event study design. Our results indicate that prices and offers de-crease significantly by 3% and 6% already in the quarter in which the tax increaseis announced in press but rise subsequently. Furthermore, we find heterogeneousresponses when distinguishing between different types of counties. Housing pricesdecrease persistently in shrinking counties, while this is at most temporarily thecase in growing, central and peripheral counties. This implies that the economicincidence of this tax varies across transactions.