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Real estate transfer taxes and property values: The Philadelphia story

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Abstract

We examine the effect of the 1988 increase in the Philadelphia real estate transfer tax on the sale price of residential property. We find that sales prices fell, as expected. While sampling variability is slightly higher than desirable, the point estimate of the key coefficient indicates a decrease in house price far greater than what would be expected with perfect capital markets. This may be attributed to either capital market imperfections or the news value of the tax increase. The burden of the transfer tax thus rests on the seller.

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References

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Authors and Affiliations

  1. Kogod College of Business Administration, The American University, USA

    John D. Benjamin

  2. Department of Economics, Penn State University, USA

    N. Edward Coulson

  3. Smeal College of Business Administration, Department of Insurance and Real Estate, Penn State University, USA

    Shiawee X. Yang

Authors
  1. John D. Benjamin
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  2. N. Edward Coulson
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  3. Shiawee X. Yang
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Benjamin, J.D., Coulson, N.E. & Yang, S.X. Real estate transfer taxes and property values: The Philadelphia story. J Real Estate Finan Econ 7, 151–157 (1993). https://doi.org/10.1007/BF01258324

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  • DOI: https://doi.org/10.1007/BF01258324

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