Farmland Owners’ Land Sale Preferences: Can They Be Affected by Taxation Programs?

Sami Myyrä and Eija Pouta


Land ownership fragmentation has resulted in the neglect of land improvement in many countries. This study aims to analyze whether this challenge could be resolved by a tax policy that encourages land sales. Using Finnish data, real estate tax and temporal relaxation on taxation of capital gains showed some potential for the restructuring of land ownership. Potential sellers who could not be revealed by traditional logit models were identified with the latent class approach. Those landowners with an intention to sell even without a policy change were sensitive to temporal relaxation in the taxation of capital gains. (JEL H21, Q15)