Tax-driven Bunching of Housing Market Transactions : The Case of Hong Kong

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

9 Scopus Citations
View graph of relations

Author(s)

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)473-501
Journal / PublicationInternational Real Estate Review
Volume18
Issue number4
Publication statusPublished - 1 Dec 2015

Abstract

We study the implications of a property market transaction tax. As property buyers are obligated to pay a transaction tax (“stamp duty” or SD) where the rate increases with the value of the transaction, there are incentives to trade at the cutoff points of the tax schedule or just below them. Thus, both “bunching in transactions” and “underpricing” should be observed near those cutoffs. Furthermore, the bunching points should change with the tax schedule. We confirm these conjectures with a rich dataset from the Hong Kong housing market and provide a measure of tax avoidance.

Research Area(s)

  • Bunching, Change in Nonlinear Tax Schedule, Housing Market, Tax Avoidance and Tax Evasion, Underpricing

Bibliographic Note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to lbscholars@cityu.edu.hk.

Citation Format(s)

Tax-driven Bunching of Housing Market Transactions: The Case of Hong Kong. / Leung, Charles Ka Yui; Leung, Tin Cheuk; Tsang, Kwok Ping.
In: International Real Estate Review, Vol. 18, No. 4, 01.12.2015, p. 473-501.

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review