Temporary Property Tax Relief and Residential Home Sales

This paper tests whether temporary property tax relief influences sales of eligible properties. We examine the short-run impact of a new five-year property tax credit made available to long-tenured senior homeowners in Maryland using property-level assessment and transaction data. We find that the temporary credit resulted in a statistically insignificant and economically modest decline in sales of eligible properties. We also find no change in non-arm's-length sales of eligible properties, which include foreclosures. The results suggest temporary property tax relief does not induce short-term lock-in effects among eligible homeowners.