Real estate transaction taxes and credit supply

Arbeitspapier

We exploit staggered real estate transaction tax (RETT) hikes across German states to identify the effect of house price changes on mortgage credit supply. Based on approximately 33 million real estate online listings, we construct a quarterly hedonic house price index (HPI) between 2008:q1 and 2017:q4, which we instrument with state-specific RETT changes to isolate the effect on mortgage credit supply by all local German banks. First, a RETT hike by one percentage point reduces HPI by 1.2%. This effect is driven by listings in rural regions. Second, a 1% contraction of HPI induced by an increase in the RETT leads to a 1.4% decline in mortgage lending. This transmission of fiscal policy to mortgage credit supply is effective across almost the entire bank capitalization distribution.

Object Details

• ISBN: 978-3-95729-812-6
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Deutsche Bundesbank Discussion Paper ; No. 04/2021

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policies and Behavior of Economic Agents: General ; Urban, Rural, Regional, Real Estate, and Transportation Economics: General ; Housing Supply and Markets
• Subject: Fiscal Shocks ; Real Estate Markets ; Mortgage Lending ; Price-to-Rentratio

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koetter, Michael ; Marek, Philipp ; Mavropoulos, Antonios
• Event: Veröffentlichung
• (who): Deutsche Bundesbank
• (where): Frankfurt a. M.
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/231316
• Last update: 10.03.2025, 11:43 AM CET