Transfer taxes and household mobility: Distortion on the housing or labor market?
TL;DR
LSE study finding 1% SDLT increase reduces household mobility by 17-20%.
Landmark academic study quantifying the mobility-suppressing effects of stamp duty. Found that every 1% increase in SDLT reduces household mobility by 17-20%, providing empirical evidence for the 'local optima trap' effect of transaction taxes.
Key Findings from Hilber & Lyytikäinen (2017)
- 1% increase in SDLT correlates with 17-20% decrease in household mobility
- Transaction taxes create significant labor market distortions
- Effects persist across income levels and property types