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

Hilber, Christian A. L. and Lyytikäinen, Teemu (2017) Transfer taxes and household mobility: distortion on the housing or labor market? Journal of Urban Economics, 101. pp. 57-73. ISSN 0094-1190

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Identification Number: 10.1016/j.jue.2017.06.002

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.

Item Type: Article
Official URL: https://www.journals.elsevier.com/journal-of-urban...
Additional Information: © 2017 Elsevier Inc.
Divisions: Geography & Environment
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Sets: Departments > Geography and Environment
Date Deposited: 21 Jun 2017 10:19
Last Modified: 30 Jan 2019 20:50
URI: http://eprints.lse.ac.uk/id/eprint/81872

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