The Journal of Quantitative & Technical Economics | Professor Tang Yugang’s Team Makes New Research Progress on Tax Refund Policy for Housing Replacement and Liquidity of the Second-Hand Housing Market

Recently, the research paper Tax Refund Policy for Housing Replacement, Stock Housing Consumption and Market Liquidity: A Quasi-Natural Experiment from Shanghai’s Second-Hand Housing Market by Professor Tang Yugang’s team was officially published in the 4th issue of 2026 of the authoritative journal The Journal of Quantitative & Technical Economics. Taking the personal income tax refund policy for housing replacement in Shanghai as a quasi-natural experiment, this study examines the impact of tax incentives in the transaction link on the second-hand housing market. The study finds that the tax refund policy for housing replacement has significantly boosted market liquidity and activated transactions, accompanied by moderate price adjustments and structural differentiation.

Against the backdrop of expanding domestic demand and promoting household consumption, housing, as a typical bulk consumption, has transaction costs and market liquidity that directly affect the efficiency of consumption release. However, existing studies mostly focus on prices and transaction volumes, with relatively limited systematic analysis of the transaction process and market liquidity.

Based on the micro-transaction data of second-hand housing from Lianjia in Shanghai, this study adopts the difference-in-differences method for empirical testing. The results show that the housing transaction cycle has been significantly shortened by about 22%-25% after the implementation of the policy, and the market turnover efficiency has been markedly improved. Meanwhile, both the transaction volume and listing volume at the community level have increased significantly, with a stronger response on the listing side, indicating that the policy promotes market liquidity through the "listing-matching-transaction" chain.

Further analysis reveals that the average housing price has experienced a moderate decline of about 1.5%-3.1% after the policy implementation. Heterogeneity results show that price adjustments are mainly concentrated in housing with strong rigid demand attributes, while upgrade housing shows price support in some high-end segments. This indicates that the policy plays a role mainly by changing the transaction structure rather than directly pushing up prices.

Mechanism analysis shows that the tax refund policy for housing replacement accelerates the transaction pace by reducing the transaction cost of "selling old houses to buy new ones" and superimposing the time constraint for housing replacement, thereby improving market operation efficiency. Overall, from the perspective of transaction chain and liquidity, this paper provides new micro evidence for understanding the release mechanism of housing consumption and the optimization of relevant policies.

Co-authors of the paper: Lecturer Wang Xiaodong, School of Public Finance and Administration, Shanghai Lixin University of Accounting and Finance; Postdoctoral Liu Yanan (Corresponding Author), School of Economics, Shandong University.

Tang Yugang is Associate Dean, Professor and PhD Supervisor of the Department of Public Finance, School of Economics, Shandong University. His main research fields include regional and urban public finance, political economy of fiscal issues, and public policy evaluation. His relevant achievements have been published in important domestic and international journals such as Economic Research Journal, Economics (Quarterly), Journal of Development Economics, and Regional Science and Urban Economics, and he has presided over scientific research projects such as the National Natural Science Foundation of China and the National Social Science Foundation of China.

Liu Yanan, PhD in Public Finance, is currently a Special Funding Postdoctoral Fellow at the School of Economics, Shandong University. Her research focuses on educational finance, population mobility and public service allocation, combining urban economics and spatial econometric methods to pay attention to educational resource allocation, housing market and local fiscal incentives. Her research results have been published in journals such as Regional Science and Urban Economics and The Journal of World Economy, and she has presided over the Youth Project of the National Natural Science Foundation of China.