Transfer taxes and household mobility: distortion on the housing or labor market?

Publication type

Research Paper

Series Number

216

Series

SERC Discussion Paper

Authors

Publication date

June 15, 2017

Summary:

We estimate the effect of the UK Stamp Duty Land Tax (SDLT) – a transfer tax on the purchase price of property or land – on different types of household mobility using micro data. Exploiting a discontinuity in the tax schedule, we isolate the impact of the tax from other determinants of mobility. We compare homeowners with self-assessed house values on either sides of a cut-off value where the tax rate jumps from 1 to 3 percent. We find that a higher SDLT has a strong negative impact on housing-related and short distance moves but does not adversely affect job-induced or long distance mobility. Overall, our results suggest that transfer taxes may mainly distort housing rather than labor markets.

Subjects

Link

http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercdp0216.pdf

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• Transfer taxes and household mobility: distortion on the housing or labor market?

  1. Christian A.L. Hilber
  2. Teemu Lyytikäinen

  Journal Article
  September 15, 2017