The Impact of Property Tax on Housing Transaction Structure and Spatial Heterogeneity: Micro Evidence from Chongqing's Second-Hand Housing Market

Keywords: Property tax; Housing prices; Hedonic price model; Differences-in-Differences (DID); Synthetic control method; Spatial heterogeneity
Abstract Type: Paper Abstract

Abstract

This study leverages the 2011 property tax pilot in Chongqing as a natural experiment, integrating macro-level panel data from 14 Chinese cities and micro-level resale housing transaction data from Chongqing's nine main urban districts to systematically evaluate the policy effects of property tax and its transmission mechanisms. Using the Synthetic Control Method (SCM), we find that the property tax significantly reduced housing prices in Chongqing over the medium-to-long term, but indicating limited economic significance. A heterogeneous Differences-in-Differences (DID) model further reveals that this effect was primarily driven by the decline in large-sized units, while education-linked housing premiums exhibited policy resistance due to the rigid coupling of school districts and housing demand. Geographically Weighted Regression (GWR) demonstrates a spatial attenuation gradient, with the policy effect weakening from the Central Business District (CBD), as core urban areas formed "price moats" through public service agglomeration. Breaking away from the traditional average-effect paradigm, this study proposes a tripartite "policy-structure-space" transmission framework, demonstrating that property tax efficacy depends on the interplay between micro-level housing transaction restructuring and spatially heterogeneous responses. We recommend future policies adopt differentiated tax base designs and coordinate with educational equity reforms to address systemic "policy leakage."