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SERC/Urban and Spatial Programme Discussion Paper
Transfer Taxes and Household Mobility: Distortion on the Housing or Labor Market?
Christian A. L. Hilber and Teemu Lyytikäinen June 2017
Paper No' SERCDP0216:
Full Paper (pdf)

JEL Classification: D23; H21; H27; J61; R21; R31; R38

Tags: transfer taxes; stamp duty; transaction costs; homeownership; household mobility

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.

This paper has been published as:
'Transfer taxes and household mobility: Distortion on the housing or labor market?', Christian AL Hilber and Teemu Lyytikäinen, Journal of Urban Economics, Volume 101, September 2017