Public revenue leakage from real estate non-disclosure laws
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Property tax is the single largest source of local own-source revenue. Due to lack of existing legal structure, county assessors are often left without access to market data. Prior to 2004, three states in the western portion of the United States had constitutions that lacked legislation regarding the disclosure of home sales. This is recognized in this research as non-disclosure laws (NDLs). New Mexico changed this legal structure in 2004 and mandated that county assessors receive all sales information in hopes that property assessments become more equitable. Using two-way fixed effects and a difference-in-differences design, I estimate the change in county level property tax revenue to be a 3.67 percent increase annually.