Guillaume Chapelle (p), Montserrat Botey

Xiaolun Yu

Homeowners save an imputed rent which is usually exempted from income taxation. This paper exploits the fiscal simulator developed by (Landais et al, 2011) to estimate this tax saving and its distribution between households in France. We show that net imputed rents represent 7% of the national net income and that their non taxation is a hidden fiscal spending estimated between 9 and 11 billions of euros. This is thus the major public spending to support homeownership while it mostly benefit to the wealthiest and the oldest age groups. Reestablishing imputed rent taxation might be an interesting way to cope with increasing capital inequalities that has been fostered by the recent increase in housing prices.

Felipe Carozzi, Christian Hilber , Xiaolun Yu (p)

Asmae Aqzzouz

The British government introduced its new flagship housing policy—Help to Buy (HtB)—in 2013. The policy aims to help households, especially first-time buyers, to overcome their credit and liquidity constraints, stimulate housing construction and increase housing affordability. To explore the economic impacts of HtB, we exploit a difference in spatial discontinuity design, taking advantage of spatial discontinuities in the scheme that emerge at the Greater London Authority (GLA) boundary and the English/Welsh border post implementation. We find that HtB substantially increased house prices and had no discernible effect on the construction volume or on aggregate private mortgage lending in the GLA, where housing supply is subject to severe long-run constraints and housing is already extremely unaffordable. HtB did increase construction numbers and did not have a price effect near the English/Welsh border, an area with less binding supply constraints and comparably affordable housing. HtB also led to bunching of newly built units below the price threshold and to smaller new units. We conclude that HtB may be an ineffective policy in already unaffordable areas.

Asmae Aqzzouz (p), Michel Dimou

Uwe Neumann

Tax rates choices are made by each local government in response of the demand of local public goods and services and the disposable tax baseLocal tax rates are a function of socioeconomic and political factors of the jurisdiction and of neighboring jurisdictions. Among this external factors we have grants which have an effect on the local tax choices of jurisdiction which was mentioned by Lago Penas (2008), economic shocks can also effect the local tax choice of a jurisdiction which was argued by Castells et al (2004) and neighboring jurisdictions could also impact the choice of local tax. For theoretical review, this last external factor have a major impact on local tax choice of a jurisdiction. It’s the main driving force in local setting. It means when a jurisdictions decides to increase or to decrease its tax rate impact automatically the tax rates of neighboring jurisdictions. This reaction implies that tax interactions or tax mimicking exist among jurisdictions. According to the economic theory, tax mimicking is due to tax competition introduced by Tiebout (1956) and Mierzkoski (1986) and yardstick competition presented by Salmon (1987) and Besley et Case (1995).

The paper uses two models applied to the counties of two French Regions (Rhône-Alpes and PACA) to study the determinant sof housing and property taxes. An original dataset has been built for 2014 for this paper. The paper also uses spatial econometrics (a spatial Durbin model and a spatial lag model) to study whether the tex rates in a county are influtiesenced by the tax rates of neighboring counties.

Uwe Neumann (p), Lisa Taruttis

Guillaume Chapelle

In urban areas, there is considerable neighbourhood-level variation in population characteristics. Using Dortmund as a case study we analyse whether and to what extent rents, housing prices and segregation dynamics corresponded with demographic ageing in urban neighbourhoods between 2007 and 2016. In a two-step analysis based on a hedonic pricing model and a discrete-choice model of housing location we find that in Dortmund so far there has been no slump of the housing market in neighbourhoods where the population ages more rapidly. Nevertheless, over the study period demographic segregation was on the rise and, according to a hedonic analysis, prices for apartments were higher in districts with a comparatively “younger” population. In the course of further demographic change in Germany, which has come to a contemporary halt due to immigration, the response to ageing on urban housing markets in terms of location choice and prices may therefore become more evident. A large-scale urban regeneration project has revitalised the housing market of a declining Dortmund community during this decade. Since local ageing has not affected housing markets severely so far, it appears to be within the scope of urban policy to upgrade the attractiveness of ageing neighbourhoods as perceived by younger generations.