Replication package for "Who Bears the Burden of Real Estate Transfer Taxes? Evidence from the German Housing Market"

This paper examines the effects of real estate transfer taxes (RETT) on property prices using a rich micro dataset of roughly 17 million German properties for the period from 2005 to 2019. Our empirical analysis exploits variation in RETT rate hikes across German states and over time. Our monthly event study estimates indicate a price response that strongly exceeds the change in the tax burden for single transactions. Twelve months after a reform, a one percentage point increase in the tax rate reduces property prices by on average 3%. Price effects are larger for apartments (-4%) than for single-family houses (-2%). Exploring potential mechanisms, we provide evidence that different holding periods are the main driver of the differential price effect between property types.