2024/11/13 by Emily Horton, Cameron LaPoint, Byron Lutz +2 · 1 citation
Economics, Econometrics and Finance · Business, Management and Accounting · #Housing Market and Economics #Housing, Finance, and Neoliberalism #Financial Literacy, Pension, Retirement Analysis
paper · doi:10.1086/732777
We examine property tax reduction as a tool for increasing housing affordability. Analyzing various tax reduction policies through the lens of property tax incidence reveals a complex relationship between affordability and property taxes, with differential effects across demographic groups. Many policies often fail to improve affordability for young first-time homebuyers and renters, sometimes worsening affordability. We present a new nationwide atlas documenting the prevalence of local measures altering property tax burdens. Quasi-experimental evidence from Georgia’s homestead exemption valuation freezes suggests strong capitalization of assessment limits into home values, reinforcing that property tax relief may worsen affordability for first-time buyers.