This paper examines how land taxation affects urban sprawl and suburban development using nationwide data from Japan. We exploit the 1994 property tax reform, which standardized the assessed-to-market value ratio for land across municipalities, generating heterogeneous land tax increases without changes in building taxation or local public expenditures. We find that a 1 percent increase in land tax burden reduced business land development by about 0.4 percent, driven by a reallocation of development from high-tax to low-tax areas rather than an overall decline. Development in low-tax areas occurred through land-use conversion and expansion into low-density areas, contributing to urban sprawl. Land markets adjusted differently by use: residential land responded through prices, while business land adjusted primarily through quantities. These results highlight an avoidance mechanism through which land taxation may unintentionally exacerbate urban sprawl.

In 2024, Finland split the general municipal property tax into land and building components, creating a de facto land value tax (LVT). We study the adoption and early consequences of this reform for municipal public finance. First, we document how municipalities set LVT rates and whether they offset land taxation by lowering other tax rates, or by adjusting spending, investment, and borrowing. Second, we analyze the determinants of LVT rate setting, focusing on the role of ownership structure and inter-municipal equalization rules. For identification, we exploit quasi-experimental variation induced by statutory minimum rates that bound local LVT choices. The project delivers the first comprehensive evidence on the implementation margins of an LVT in a contemporary setting, informing the design of property taxation and the fiscal instruments available to local governments.

We examine political incentives in local tax setting using Germany's 2025 property tax reform. The reform created exogenous variation in the tax base across voter groups and regions by allowing states to adopt different property valuation models. In some federal states, new standardized valuations implicitly set a higher tax base for rental properties than for owner-occupied units of comparable size. We investigate whether municipal tax multipliers increased more after the reform details were announced when two conditions were met: municipalities were governed by homeowner-friendly parties and were in states where tenants eventually face a higher tax base. To avoid media scrutiny and meet public expectations of revenue neutrality, we expect these increases to occur beforehand. Using a triple difference-in-differences design and panel data from 1,148 West German municipalities, we confirm our hypothesis. Our findings provide the first causal evidence of political drivers behind sharp increases in German property tax multipliers.

This paper studies the capitalization of property taxes into housing prices using a large-scale natural experiment in the Czech Republic. We exploit a 2024 reform that sharply increased statutory tax rates for municipalities above specific population thresholds and apply regression discontinuity and difference-in-discontinuities designs to isolate exogenous variation in tax liabilities. We find strong evidence of capitalization: an 80% statutory rate increase reduced property prices by 12.6% to 17.5% in non-touristic municipalities. The effects are heterogeneous, with significantly weaker responses in touristic areas and in municipalities with high pre-existing tax burdens. Despite the sizable fiscal shock, we detect little evidence of strategic tax interaction across local governments, suggesting that institutional constraints limit competitive tax-setting. Overall, the results provide robust support for the capitalization hypothesis and highlight the role of market segmentation and local amenities in shaping tax incidence.