Economic Effects of the Real-Estate Purchase (Transfer) Tax

The real estate market plays an important role in meeting the housing needs of the population. Tax regulation in this sphere is an effective tool for market control and budget replenishment. However, it can also lead to undesirable consequences by limiting the ability of private households to acquire desired properties. This work focuses on the real estate transfer tax (RETT) as one of the largest in terms of a one-time payment. The goal of this study is to confirm the direct or indirect impact of this tax on various aspects of private households' lives, such as the price of purchasing/renting property, the volume of transactions, and the number of newly constructed residential buildings. The research is conducted using the example of European member countries of the Organization for Economic Co-operation and Development (OECD) employing the Vector Autoregression with Exogenous Variables (VARX) model and the Demeaned Mean Group (DMG) model. The analysis results indicate no impact of the RETT on transaction volume, while the effects on other indicators are heterogeneous and depend on the model and sample used.