RESIDENTIAL PROPERTY TAX CAPITALIZATION: DISCOUNT RATE EVIDENCE FROM CALIFORNIA
- 1 June 1994
- journal article
- research article
- Published by University of Chicago Press in National Tax Journal
- Vol. 47 (2) , 341-348
- https://doi.org/10.1086/ntj41789071
Abstract
In spite of the voluminous literature on property tax capitalization, this paper is the first to derive a discount rate empirically. The paper uses an unique data set from a Mello-Roos Community Facility District (CFD), where taxes are expected to be totally capitalized into property values. Using a standard hedonic pricing model, the results show that buyers of homes within the CFD capitalize taxes into the prices of purchased properties at a discount rate of around four percent.Keywords
This publication has 5 references indexed in Scilit:
- Capitalization of Property Tax Differentials within and among MunicipalitiesLand Economics, 1983
- Local Tax and Expenditure Capitalization: Integrating Evidence From the Market and Political ProcessesPublic Finance Quarterly, 1982
- CAPITALIZATION OF THE EFFECTIVE PROPERTY TAX RATE ON SINGLE FAMILY RESIDENCESNational Tax Journal, 1974
- The Effects of Property Taxes and Local Public Spending on Property Values: A Comment and Further ResultsJournal of Political Economy, 1973
- The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout HypothesisJournal of Political Economy, 1969