RT Journal Article
SR Electronic
T1 The Effects of Changes in Capital Gains Taxes on Land Sales: Empirical Evidence from Finland
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 582
OP 594
DO 10.3368/le.87.4.582
VO 87
IS 4
A1 Pietola, Kyösti
A1 Myyrä, Sami
A1 Pouta, Eija
YR 2011
UL http://le.uwpress.org/content/87/4/582.abstract
AB We estimate the landowner response to and fiscal effects of a temporary reduction in capital gains taxes imposed on land sales. The underlying normative decision rules are first derived and solved numerically using stochastic dynamic programming. The landowner preferences and willingness to sell land are then estimated in the reduced form using survey data from Finland. The results suggest that the timing of land sales and land sales quantities respond significantly to tax incentives. Certain temporary tax waiver programs could maintain the current tax revenues with fewer trade distorting effects on the land market. (JEL H21, R10)