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CentrePiece article
Stamp duty, mobility and the UK housing crisis
Christian A. L. Hilber and Teemu Lyytikäinen
October 2017
Paper No' CEPCP516:
Full Paper (pdf)

CentrePiece 22 (3) Autumn 2017

Tags: stamp duty; real estate transfer tax; transaction costs; household mobility

The UK’s stamp duty land tax raises substantial revenues for the government, but it also contributes to the UK’s housing crisis by preventing households from moving to more suitable homes. That is the central conclusion of research by Christian Hilber and Teemu Lyytikäinen. They explain how replacing stamp duty with better-designed local taxes could help to alleviate the country’s crisis of housing affordability. Their study shows that stamp duty prevents people moving to a more suitable dwelling in their local area, but it has little impact on long-distance relocation. Abolishing stamp duty could increase the mobility of homeowners substantially.

This article summarises ‘Transfer Taxes and Household Mobility: Distortion on the Housing or Labor Market?’, Christian Hilber and Teemu Lyytikäinen, SERC/Urban and Spatial Programme Discussion Paper No.216, June 2017