Working Paper: CEPR ID: DP10063
Authors: Timothy J. Besley; Neil Meads; Paolo Surico
Abstract: This paper exploits the 2008-09 stamp duty holiday in the United Kingdom to estimate the incidence of a transaction tax on housing. The average reduction in the after-tax sale price is found to be around £900 against the backdrop of an average tax reduction of about £1500. While we estimate an increase in transactions of properties affected by the tax holiday around 8%, most of this effect appears to have reversed rapidly after the policy was withdrawn, suggesting mostly a short-term retiming of transactions. The findings are calibrated to a simple bargaining model to show they imply that about sixty percent of the surplus generated by the holiday accrued to buyers.
Keywords: surplus; incidence; surveyors; evaluation; tax holiday
JEL Codes: H22; R32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 2008-09 stamp duty holiday (H26) | housing transaction prices (R31) |
| 2008-09 stamp duty holiday (H26) | housing transaction volumes (R31) |
| housing transaction prices (R31) | buyers capturing surplus (D16) |
| 2008-09 stamp duty holiday (H26) | short-term retiming of transactions (G14) |