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Recently, there exist a paradox of increasing in housing priceand vacancy rate in Taiwan housing markets. This situation makespeople hard to afford their own housing. To improve this situation, the vacancy tax is one of the recommended way. In this study, webuild a empirical model to simulate the effect of vacancy tax. Wefirstly study the machinism of vacant land tax and house tax, andsuggests a feasible machinism of vacancy-tax. Secondarily, weconstruct a market equilibrium model with vacancy tax. Since therecould exist a time lag in housing supply, we also tried to joinhousing supply function with cobweb theory, and calibrated themodel from a time series data. The empirical data are selectedfrom the housing sales records of Taiwan and Taichung city. Theresult shows that Taiwan''s housing supply function does not havecobweb phenomenon, and vacancy-tax can efficiently lower the housingprice and the vacancy rate. Besides, the rate of house using andsocial welfare is also improved.
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