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Open AccessArticle

Impact of Property Tax on Housing-Market Disequilibrium in Different Regions: Evidence from Taiwan for the period 1982–2016

1
School of Government, Nanjing University, Nanjing 210093, China
2
School of Geographic and Oceanographic Sciences, Nanjing University, Nanjing 210093, China
3
Department of Land Management, College of Construction and Development, Feng Chia University, Taichung City 40724, Taiwan
4
Department of Architecture and Urban Design, Chinese Culture University, Taipei City 11114, Taiwan
*
Authors to whom correspondence should be addressed.
Sustainability 2018, 10(11), 4318; https://doi.org/10.3390/su10114318
Received: 6 October 2018 / Revised: 16 November 2018 / Accepted: 18 November 2018 / Published: 21 November 2018
(This article belongs to the Special Issue Real Estate Economics, Management and Investments)
Although Taiwan has had a unique property tax system for a long time, oversupply and increasing prices have persisted in the regional market during recent decades. In order to shed light on this problem, this study investigated the impact of property taxation on housing markets in different regions from a disequilibrium viewpoint based on the stock-flow model. The panel data of 20 counties or cities in Taiwan for the period from 1982 to 2016 was examined. The empirical findings verified that housing price was the most important factor for influencing the long-run housing supply and demand in regions both with and without oversupply. The low interest rate policy was an important factor driving the long-run housing demand, but only in over-supply regions. The current property tax system cannot impact the long-run housing demand, only the short-run demand in both regions. Moreover, the property tax cannot effectively disturb the supply behavior in the long-run in both regions. This study also confirmed that housing-market disequilibrium existed in regions both with and without oversupply, making up the gap. The property tax’s impact on the adjustment speed to long-run equilibrium in over-supply regions was weaker than under-supply regions. View Full-Text
Keywords: property tax; housing market; disequilibrium; region; Taiwan property tax; housing market; disequilibrium; region; Taiwan
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Lin, S.-H.; Li, J.-H.; Hsieh, J.-C.; Huang, X.; Chen, J.-T. Impact of Property Tax on Housing-Market Disequilibrium in Different Regions: Evidence from Taiwan for the period 1982–2016. Sustainability 2018, 10, 4318.

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