Home Economics: The Effect of a Foreign Buyer Tax on Marriages and Births
Abstract
A growing literature argues that housing affordability is an important determinant of family formation, influencing both the timing and incidence of marriage and childbearing. We exploit the staggered introduction of British Columbia’s foreign buyer tax (FBT), which imposed a 15-20% transfer tax on residential property purchases by foreign buyers beginning in 2016, to examine how a policy-induced decline in housing demand affected marriage and fertility. Using administrative data on marriages and births at the Local Health Area level from 2007-2021 and a staggered difference-indifferences design, we find that treated regions experienced approximately 1.6 additional births and 2.7 additional marriages per 1,000 women aged 20-44 each year following implementation. Log specifications imply increases of roughly 5 percent in births and 12 percent in marriages. These findings are robust across alternative estimators and a variety of robustness checks. We find little evidence that the results are driven primarily by migration or by declines in family formation in neighboring regions. Taken together, our results suggest that housing affordability is an important determinant of marriage and fertility decisions and that housing market policies can generate meaningful demographic spillovers.
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