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The incidence of transaction taxes: evidence from a stamp duty holiday

Besley, Timothy and Meads, Neil and Surico, Paolo (2014) The incidence of transaction taxes: evidence from a stamp duty holiday. Journal of Public Economics, 119. pp. 61-70. ISSN 0047-2727

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Identification Number: 10.1016/j.jpubeco.2014.07.005

Abstract

This paper exploits the 2008–09 stamp duty holiday in the United Kingdom to estimate the incidence of a transaction tax on housing. The average reduction in the after-tax sale price is found to be around £900 against the backdrop of an average tax reduction of about £1500. While we estimate an increase in transactions of properties affected by the tax holiday around 8%, most of this effect appears to have reversed rapidly after the policy was withdrawn, suggesting mostly a short-term retiming of transactions. The findings are calibrated to a simple bargaining model to show they imply that about sixty percent of the surplus generated by the holiday accrued to buyers.

Item Type: Article
Official URL: http://www.journals.elsevier.com/journal-of-public...
Additional Information: © 2014 Elsevier B.V.
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
J Political Science > JN Political institutions (Europe) > JN101 Great Britain
JEL classification: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H22 - Incidence
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R32 - Other Production and Pricing Analysis
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 07 Oct 2014 11:15
Last Modified: 22 Jul 2016 23:00
Projects: ERC Starting Independent Grant – Agreement 263429
Funders: European Research Council
URI: http://eprints.lse.ac.uk/id/eprint/59637

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