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

Christian Hilber () and Teemu Lyytikäinen ()

Journal of Urban Economics, 2017, vol. 101, issue C, 57-73

Abstract: 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.

Keywords: Transfer taxes; Stamp duty; Transaction costs; Homeownership; Household mobility (search for similar items in EconPapers)
JEL-codes: D23 H21 H27 J61 R21 R31 R38 (search for similar items in EconPapers)
Date: 2017
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Related works:
Working Paper: Transfer Taxes and Household Mobility: Distortion on the Housing or Labor Market? (2017) Downloads
Working Paper: Transfer taxes and household mobility: distortion on the housing or labor market? (2017) Downloads
Working Paper: Transfer Taxes and Household Mobility: Distortion on the Housing or Labor Market? (2015) Downloads
Working Paper: Transfer taxes and household mobility: distortion on the housing or labour market (2015) Downloads
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