Abstract
Since the implementation of the House and Land Transactions Income Tax by the government in 2016, the housing market has exhibited a phenomenon of "tax-induced volume adjustment" rather than "taxation pricing," failing to effectively regulate housing prices. Furthermore, with the introduction of the House and Land Transactions Income Tax 2.0, the intended objective of reducing housing prices has not been achieved. However, the actual impact of this policy on the housing market remains a topic of significant debate, with numerous controversies and unknown factors yet to be resolved. Within the framework of Tax Incidence theory, the House and Land Transactions Income Tax, as an innovative tax policy, has become a focal point of concern for both academia and policymakers. During the heavy taxation lock-in period associated with this policy, concerns have been raised about its potential to indirectly elevate housing prices, with arguments suggesting that some homeowners may opt to extend their property holding periods or shift the tax burden onto buyers by raising sale prices, thereby indirectly influencing housing prices. This study focuses on Taipei City, utilizing real transaction data from 2014 to 2020 and applying the Difference-in-Differences (DID) method to analyze whether the imposition of the House and Land Transactions Income Tax effectively suppresses housing price increases and whether shifting behavior under the tax structure exerts an indirect impact on housing prices.
