An Analysis of the Influence of Property Tax on Housing Prices in the Apulia Region (Italy)

Abstract

Abstract:In this research, the socio-economic determinants of housing market values have been examined, highlighting their respective contributions to the formation of the property prices and, in particular, verifying the property tax liability. The property tax is a factor that could determine, through modest fluctuations, the revival of the property demand, generating positive effects also on the construction sector, which has been currently affected by the negative real estate contingency. The functional correlations of housing prices with the main socio-economic variables considered (i.e., housing rents, household incomes, household consumptions, property taxes, population and mean population age) have been explained through an econometric analysis implemented with an innovative methodology that uses multi-objective genetic algorithms. The analysis is contextualized to the Apulia region in the South of Italy, and the population of the sample studied consists of 258 individuals, corresponding to the municipalities of the region. In particular, the data collected for each variable considered refer to two different moments, that is, the year 2011 and the year 2015, in order to take into account the fiscal tightening that has occurred in Italy in this period of time. The elaborations carried out have allowed us to enucleate interesting functional relationships between property prices and the explanatory variables considered.

Contextualized Property Market Models vs. Generalized Mass Appraisals: An Innovative Approach

“…A specific application of a multi-objective genetic algorithm for the identification of the "best" regression models, named evolutionary polynomial regression, has been recently implemented to several property issues. Initially applied to hydraulic systems [94][95][96], the methodology has been borrowed and used to elicit the correlations between the property market and socio-economic variables [97,98], energetic factors [99], and for property tax purposes [100]. Other studies have allowed researchers to highlight the advantages of the methodology compared to orthodox [101] and innovative mass appraisal approaches [102].…”

Multivariate Dynamic Analysis and Forecasting Models of Future Property Bubbles: Empirical Applications to the Housing Markets of Spanish Metropolitan Cities

“…This method constitutes a generalization of the stepwise regression, that is linear with reference to the regression parameters and non-linear in the model structures. In particular, the method uses a genetic algorithm in order to iteratively investigate the model mathematical structures [66,68]. The key idea of the method is to search firstly for the best form of the function, i.e., a combination of vectors of independent variables (inputs), and then to perform least squares regression to find the adjustable parameters elevated by the appropriate exponents for each combination of inputs.…”

“…Tsatsaronis and Zhu [64] have demonstrated that taxes and hereditary expectations are short-term housing price determinants in many countries. López García and Tajani et al [65,66] have pointed out the influence of tax policies on the changes of housing prices respectively in Spain and in Italy.…”

A Feasibility Analysis of The Refurbishment Investments in The Italian Residential Market

“…. x n ) and to identify the explanatory factors most influential in the mechanisms for the formation of the housing prices in different territorial contexts [58,59] and to determine the marginal contribution of each of them on the prices. The application of EPR to the construction cost sector, therefore, reveals interesting and unexplored potentialities.…”