Abstract: Based on the 2006-2012 panel data of 35 cities nationwide, this paper makes use of the DID (difference-in-difference) method to examine the impact of the pilot property tax carried out in Shanghai and Chongqing on the real estate prices of commercial buildings, residential houses in the commercial buildings and luxury residential houses. The study finds that there exists no obvious expected policy effect at the pilot cities. The pilot property tax has significantly lowered housing prices, but the impact on the prices of commercial buildings and luxury residential houses is not significant. Therefore, the regulation on the real estate market will be greatly limited if it relies solely on the real estate tax policy; the regulation should be carried out comprehensively by integrating with other means.

Key words: property tax; commercial housing prices; prices of luxury houses; DID method