The effect of the UK stamp duty land tax on household mobility

Christian Hilber and Teemu Lyytikäinen

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 R38 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-07
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Citations: View citations in EconPapers (4)

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http://eprints.lse.ac.uk/58605/ Open access version. (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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