Property Tax Revenue and Housing Market Dynamics: Empirical Analysis of Their Interrelationship

Research objectives: This study aims to analyze the relationship between property tax revenues and housing price dynamics, with a particular focus on their interaction during different economic periods. Design/Methodology/Approach: The research is based on a quantitative analysis of secondary data derived from U.S. housing market indicators and aggregate property tax revenues over the period 1999–2020. A comparative and trend analysis approach is applied to identify patterns and structural relationships. Research findings: The findings reveal a strong long-term positive correlation between housing prices and property tax revenues. However, during economic crises, particularly the 2007–2009 financial crisis, housing prices show significant volatility, while property tax revenues remain relatively stable due to lagged valuation mechanisms. Theoretical contributions/Originality: The study contributes to public finance theory by highlighting the asymmetric response of property tax revenues to housing market fluctuations and emphasizing the stabilizing role of property taxation in fiscal systems. Implications for practitioners/policy: The results suggest that property tax systems can serve as a reliable and stable source of government revenue. Policymakers should focus on improving valuation systems and enhancing transparency to optimize tax performance. Limitations/Research implications: The study is limited by its reliance on aggregate data and does not account for regional disparities. Future research may incorporate micro-level data and cross-country comparisons.