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

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 (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: F3 G3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-pbe and nep-ure
Date: 2017-06
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http://eprints.lse.ac.uk/83639/ Open access version. (application/pdf)

Related works:
Journal Article: 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? (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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