Center for Policy Research
Property Tax Web Series
Reducing Transaction Taxes on Housing in Highly Regulated Economies
Christian Bontemps, Frederic Cherbonnier, and Thierry Magnac
April 2026
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The existence of transaction taxes reduces transactions, and in the case of housing, reduces household mobility and affects the costs of downsizing in dire times. We construct and estimate an overlapping generation model in which households are heterogeneous in age and earnings, and prudential regulation and the tax system are modeled in fine detail. These housing and public policies are likely to affect markets globally, and clearing both rental and property markets is important when evaluating them. We use the institutional and data setting of France, where transactions taxes are some of the highest in Europe, and evaluate the counterfactual impact of reducing transaction taxes from 14% to 6%, similar to US levels. The impact on transactions is strong, but the impact on welfare remains limited.
This paper was presented by Frederic Cherbonnier (Toulouse School of Economics) on April 10, 2026 as part of the 2025-2026 Syracuse-Chicago Webinar Series on Property Tax Administration and Design. Cameron LaPoint (Yale School of Management) was the discussant for this presentation.
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 Heidi Perry. For questions about this paper, please contact the author or authors.