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The main developed countries adopt the quantitative easing monetary policy to stimulate the economy in recent years; in the meanwhile, the real estate market is also blowing up because of the excess fund seeking investment vehicles. Owing to stabilizing the real estate market, the government in Taiwan utilizes the luxury tax in 2011 and real value registry scheme in 2012 to reduce the volatility and the price bubble of the real estate. Thus, this study inspects the influence of implementing luxury tax and real value registry scheme on the real estate market in Taiwan, so as to understand whether these policies are effective. We employ the construction companies listed in the Taiwan stock exchange as samples and adopt the event study method to analyze the stock prices pattern of sample companies, and then examine the effectiveness of the luxury tax and real value registry scheme. In addition, we also compare the difference of the effectiveness between these two policies by multiple linear regression analysis, so as to provide a reference for government making policy.
The results of this study show that: 1. the volatility of stock return in the construction industry is reduced after the adoption of luxury tax and real value registry scheme, that is, these two policies stabilize the real estate market; 2. the implementation of luxury tax and real value registry scheme generate short-term negative abnormal returns of construction stocks, which means these policies can cool down the real estate market in short term; 3. the period of the negative abnormal return arisen from the real value registry scheme is longer than that resulted from the luxury tax; 4. the value of negative abnormal returns on construction stocks from the real value registry scheme is smaller than that in luxury tax, that is, the negative impulse of the real value registry scheme on real estate market is greater than the one of luxury tax; 5. there is a significant positive correlation among market returns, size premium, growth premium and the stock price of construction industry in three factors model, however, the implementation of luxury tax and real value registry scheme do not affect the real estate market in statistical significance.
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