Housing Wealth Concentration and Redistributive Impact of Property Tax: Evidence from a Database on French Households’ Housing Wealth.
Reasearch on housing wealth and housing taxation has long been hindered by the lack
of well-suited data linking housing units and households. This study makes a major
step towards filling this gap by introducing a new exhaustive database on French households’
housing wealth. This study makes three different contributions to the literature.
The first contribution consists in describing in detail the methodology used to
construct the database. by systematically combining administrative data (cadastral
data, fiscal and social data on income, data on households, real estate transactions
data and private companies ownership data). This database involves a detailed description
of households (composition, income, place of residence) and their housing wealth.
Second, this study analyzes the concentration of housing ownership, with a focus
on dwellings owned by multiple households. The average number of dwellings owned by
households increases with their standard of living, from less than 1 dwelling per
household in the bottom 50 percent to 2.4 dwellings in the top 10% and 4 dwellings
in the top 1%. While the first two dwellings owned by households are almost systematically
used as primary or secondary residences, the next dwellings are most often rental
investments. Rental dwellings differ from other dwellings in two respects: they are
more often owned through a real estate non-trading company (société civile immobilière) and are highly concentrated: households owning at least five dwellings account for
3.5 percent of households, but own 50 percent of all rental dwellings owned by natural
persons. On the other hand, residential housing (occupied by homeowners) is less concentrated
than disposable income.
Third, this study analyses the redistributive effects of the property tax on households’
housing wealth. The weight of property tax expressed as an average share in disposable
income increases with the households’ standard of living, except for the lowest and
highest percentiles of the distribution. This result reflects, among other things,
the fact that home ownership increases with the standard of living. However, when
restricting the analysis to taxable households (those owning at least one dwelling),
the weight of property tax decreases with the standard of living in the first third
of the distribution, remains flat until the top 5% and decreases again in the top
of the distribution. Finally, from a geographical point of view, the weight of property
tax varies significantly between regions - rather low in the east and west of France,
and high around the Mediterranean - and even more markedly within regions: in the
greater Paris region (Île-de-France), it is much lower in richer areas (Paris and Hauts-de-Seine) than in poorer ones (Seine-Saint-Denis).