The Effect of the UK Stamp Duty Land Tax on Household Mobility

Christian Hilber and Teemu Lyytikäinen

SERC Discussion Papers from Centre for Economic Performance, LSE

Abstract: We estimate the effect of the UK Stamp Duty Land Tax on household mobility using micro data. Exploiting a discontinuity in the tax schedule as a quasi-experimental setting, we isolate the impact of the stamp duty from other determinants of mobility. Our empirical strategy essentially compares similar households with self-assessed house values on either sides of a cut-off value where the tax rate increases from 1 to 3 percent. We find that a higher stamp duty strongly negatively affects a household's propensity to move: the 2 percentage-point increase in the stamp duty may reduce mobility of homeowners by around 40 percent. This adverse effect is mainly confined to short-distance and non-job related moves.

Keywords: Stamp duty; real estate transfer tax; transaction costs; household mobility (search for similar items in EconPapers)
JEL-codes: D23 H21 H27 J61 R21 R31 R38 (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-acc and nep-ure
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Citations: View citations in EconPapers (4)

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http://cep.lse.ac.uk/pubs/download/sercdp0115.pdf (application/pdf)

Related works:
Working Paper: Transfer Taxes and Household Mobility: Distortion on the Housing or Labor Market? (2015)
Working Paper: Housing Transfer Taxes and Household Mobility: Distortion on the Housing or Labour Market? (2015)
Working Paper: The effect of the UK stamp duty land tax on household mobility (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:sercdp:0115

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