On Wednesday March 18th, a session of the ISEG Research Seminars will take place from 13.00 to 14.00. The guest speaker will be João Pereira dos Santos.
The ISEG Research Seminars are held every week on Wednesdays, with the participation of professors from ISEG, as well as from other Portuguese and international educational institutions.
Title
Can Abolishing Transaction Taxes Help the Young? (with Carolina Nunes and José Pedro Sousa)
Abstract
We examine the effects of a property transaction tax and stamp duty exemption for first-time home-buyers below 35 years old in Portugal. Leveraging comprehensive administrative records covering the universe of real estate transactions merged with personal income tax records, we exploit discontinuities in the policy design to document the effects on the number of transactions and house prices. Our findings indicate that the tax exemption resulted in substantial compositional shifts in the age distribution of buyers immediately following the policy's introduction, driven by an increase of around 30% in house purchases by eligible buyers. While the prices of properties bought by young eligible buyers remained stable, we find suggestive evidence of negative spillover effects for older non-eligible buyers, with an increase of 5% in house prices in the post-reform period. We further analyze the role of income in shaping house-buying decisions and the likelihood of moving as a consequence of the tax exemption.
