Real Estate Speculation and Antispeculation Taxes

摘要

Antispeculation tax activity has appeared at the State and municipal levels in the form of legislation or proposals for special capital gains taxes applied to sets of transactions regarded as ''speculative.'' The scope of the targeted activity is reduced, however, by allowing a variety of exemptions. Vermont is the only State where antispeculation taxes have been instituted -- for the protection of agricultural lands. The District of Columbia's Real Property Tax Act illustrates a municipal measure that imposed an excise tax on the transfer of residential real property with the intent of preserving neighborhoods. Canada and New Zealand also have antispeculation tax laws. These measures are based on charges that speculation has negative effects on real estate prices and on the way land and buildings are used. It is claimed that speculators destabilize prices by producing capricious fluctuations; that they maintain artificially high price levels for prolonged periods; that they cause sprawl, ''leapfrog'' development and other inefficient and undesirable land use patterns; and that they promote urban neighborhood fragmentation and transition. All of these charges overlook the important contribution of speculators as the agents of intertemporal arbitrage -- speculators are the needed purveyors of the useful services of foresight and risk - bearing. Furthermore, legislators target specific subgroups of speculators or speculative transactions and exempt others, appearing to represent special interest opposition to economic change in real estate markets and favoring traditional patterns of land use. In general, real estate speculation is not fundamentally dissimilar to other forms of speculative activity, and policy measures undertaken for the express and single purpose of stemming real estate speculation are unsound. Legislators are apparently aware of this, since so few antispeculation measures have been passed. Footnotes and 37 references are given.