Abstract
This article analyzes how a property tax a¤ects a lease-sale strategy of a durable-good monopolist, and discusses its implication on social welfare with a two-period model. Our model derives some interesting results: (i) Concurrent leasing and selling can be the unique solution. (ii) The property tax causes the monopolist to spread production over two periods. (iii) The total stock of goods is increased by the property tax. This implies that, contrary to general belief, social welfare can be enhanced by the tax under certain conditions.
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