Property Taxation and the Demand for Floor Space in Japan
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International Real Estate Review
This is the first study applying the econometric analysis of piecewise-linear budget constraints arising from space-linked property taxation to Japanese housing data. The model employed is the classical Hausman type with convex piecewise-linear budget constraints and fixed preferences. We estimate that if spaced-linked property taxation for newly built houses is abolished, it would then eliminate a current excess tax burden per household of approximately 25,000 yen.