Transfer taxes and household mobility: Distortion on the housing or labor market?
Hilber, Christian A.L.; Lyytikäinen, Teemu (2017)
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Hilber, Christian A.L.
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.
D23, H21, H27, J61, R21, R31, R38
Transfer taxes, Stamp duty, Transaction costs, Homeownership, Household mobility