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SERC/Urban and Spatial Programme Discussion Paper

The Effect of the UK Stamp Duty Land Tax on Household Mobility


We estimate the effect of the UK Stamp Duty Land Tax on household mobility using micro data. Exploiting a discontinuity in the tax schedule as a quasi-experimental setting, we isolate the impact of the stamp duty from other determinants of mobility. Our empirical strategy essentially compares similar households with self-assessed house values on either sides of a cut-off value where the tax rate increases from 1 to 3 percent. We find that a higher stamp duty strongly negatively affects a household’s propensity to move: the 2 percentage-point increase in the stamp duty may reduce mobility of homeowners by around 40 percent. This adverse effect is mainly confined to short-distance and non-job related moves.


Christian A. L. Hilber and Teemu Lyytikäinen

23 July 2012     Paper Number SERCDP0115

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This SERC/Urban and Spatial Programme Discussion Paper is published under the centre's Urban programme.