Reconstruction of Local Tax System and Improvement of Urban Housing Affordability: Evaluation Based on the Synthetic Control Method of Real Estate Tax Pilot

• Yuan Liu

  Author

This article takes the real estate tax pilot policies implemented in Shanghai and Chongqing since 2011 as an example. The authors using the SCM, to compare the changes between the pilot cities and the synthetic control cities before and after policy implementation, to evaluate the impact of local tax system restructuring on urban housing affordability. Based on urban panel data from 2008 to 2023, it has been found through research that the actual housing price to income ratio in Shanghai has remained lower than the composite control level after the pilot of property tax, and the policy effect is negative and expanding year by year, indicating that the pilot policy has significantly improved the affordability of housing in Shanghai; And the policy effects of Chongqing in each year are mainly negative, although there are significant fluctuations, overall they also show an improving trend. At the same time, the placebo test results showed that there were no similar policy effects after advancing or replacing the treatment group, indicating the robustness of the baseline results. Based on the above results, the pilot policy of real estate tax has an improving effect on the affordability of urban housing. This study can provide empirical evidence for the new round of local tax system restructuring policies, and has reference value for optimizing the tax system structure and implementing tailored policies.

• JAESD000017.pdf