Quantity, price, and compliance effects of a second-home taxation reform in France

Since 2015, French municipalities facing high housing market pressures have been allowed to levy a surcharge on the housing tax applied to second homes. Using a synthetic difference-in-differences design, we find a substantial decline in the declared number of second homes and a significant increase in housing tax revenues in treated municipalities, but no evidence of a decrease in housing prices. Drawing on dwelling-level transition microdata, we show that most of the apparent reduction in second homes is driven by strategic reclassification for tax purposes rather than genuine changes in occupancy.