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The Tax-Induced Holding Periods of Real Estate Investors

The Journal of Real Estate Finance and Economics

Volume 8, Issue 1, Article 5 (Abstract)

Title:

The Tax-Induced Holding Periods of Real Estate Investors: Theory and Empirical Evidence

Author:

George W. Gau and Ko Wang 

Abstract:

This article reexamines holding period decisions in real estate investment. It develops and empirically tests a holding period

model recognizing not only taxes but also refinancing and investor-specific determinants. Based on a sample of over 1,000 real

estate transactions with observed holding periods, the results of our tests support the conclusion that investors’ consumption

and investment preferences and prevailing markets interest rates are more important than tax issues in determining the holding

periods of real estate investors. 

Keywords:

Real estate investment, holding period