Center for Policy Research
Property Tax Web Series
A Bad Bunch: Asset Value Under-Reporting in the Mumbai Real Estate Market
Santosh Anagol, Vimal Balasubramaniam, Tarun Ramadorai, and Antoine Uettwiller
February 2023
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Abstract
Real-estate values are often under-reported to evade taxes and hide wealth built from tax-evaded income. We develop a new method to estimate under-reporting, and employ it on large and granular administrative data from the Mumbai real estate market. The approach compares bunching of reported values around government-assessed guidance values with a third-party measure of true under-lying transactions prices. We estimate that 13 percent of value in Mumbai real estate is under-reported between 2013 and 2022. Secondary market transactions witness a post-demonetization decline in under-reporting. Properties with mortgages from public-sector banks and from banks with high non-performing assets exhibit greater under-reporting.
This paper was presented by Santosh Anagol (University of Pennsylvania) on February 10, 2023 as part of the 2022-2023 Syracuse-Chicago Webinar Series on Property Tax Administration and Design. Caroline Weber (University of Kentucky) was the discussant for this presentation. Weber comments on Anagol's "A Bad Bunch: Asset Value Under-Reporting in the Mumbai Real Estate Market."
This Syracuse-Chicago Webinar Series on Property Tax Administration and Design aims to gather insight and scholarship through domestic and international comparative studies with common threads to help reform and improve property tax administration and design in the U.S. and other countries facing similar problems.
For questions about the webinars, please contact Zia Jackson. For questions about this paper, please contact the author or authors.