Transaction-tax evasion in the housing market

José G. Montalvo, Amedeo Piolatto*, Josep Raya

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

2 Citations (Scopus)


We model the behaviour of a mortgagor considering to evade the real estate transfer tax. We build an observable measure of over-appraisal that is inversely related to tax evasion and conclude that the tax authority could focus auditing efforts on low-appraisal transactions. Our empirical analysis confirms the predictions using a unique database for Spain, where we directly observe: real payment, value declared to the authority and appraisal. We also argue that individual characteristics (e.g. education of the buyer) and local characteristics (e.g. local levels of corruption and trust) explain part of the observed heterogeneity in evasion. The theoretical model is augmented with guilt and stigma to be consistent with the observed heterogeneity.

Original languageEnglish
Article number103526
JournalRegional Science and Urban Economics
Publication statusPublished - Mar 2020


  • Appraisal
  • Housing market
  • Loan-to-value
  • Mortgage
  • Tax evasion
  • Tax-morale
  • Transfer tax


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