Abstract
The purpose of this study is to empirically examine the effect on ownership tenure for residential housing under an acquisition-based property tax system. The state of Florida has an acquisition-based property tax system whereby annual assessments are capped to protect existing homeowners; the assessment is only adjusted to reflect market value upon resale. We hypothesize that such a system would lengthen the average tenure of residential home ownership, since the transactions costs of intra-state moves are magnified by the lost property subsidy. A sample of 20 Florida counties is used to examine average and median residential housing tenure at two distinct points in time to investigate changes in housing tenure. The results do not support the hypothesis. Possible mitigating factors included increased residential housing demand from a large population influx, escalating residential property values, low interest rates and easy credit availability, and homeowners adjusting to the acquisition-based property tax system.
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