Housing Market Responses to Transaction Taxes: Evidence From Notches and Stimulus in the U.K.

Michael Carlos Best; Henrik Jacobsen Kleven

doi:10.1093/restud/rdx032

Housing Market Responses to Transaction Taxes: Evidence From Notches and Stimulus in the U.K.

The Review of Economic Studies ◽

10.1093/restud/rdx032 ◽

2017 ◽

Vol 85 (1) ◽

pp. 157-193 ◽

Cited By ~ 50

Author(s):

Michael Carlos Best ◽

Henrik Jacobsen Kleven

Keyword(s):

Housing Market ◽

Market Responses ◽

Transaction Taxes

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Explicit Measures of Impacts of Transaction Taxes as Market Cooling Measure: Evidence from the Sellers’ Stamp Duty in Singapore Housing Market

SSRN Electronic Journal ◽

10.2139/ssrn.3400017 ◽

2019 ◽

Cited By ~ 2

Author(s):

Yongheng Deng ◽

Yong Tu ◽

Yanjiang ZHANG

Keyword(s):

Housing Market ◽

Transaction Taxes ◽

Stamp Duty ◽

Explicit Measures

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LABOR TAX REDUCTIONS IN EUROPE: THE ROLE OF PROPERTY TAXATION

Macroeconomic Dynamics ◽

10.1017/s136510052000022x ◽

2020 ◽

pp. 1-33

Author(s):

Marcin Bielecki ◽

Nikolai Stähler

Keyword(s):

Housing Market ◽

New Keynesian ◽

Property Taxes ◽

Real Economy ◽

Property Taxation ◽

Tax Reduction ◽

Labor Tax ◽

Stocks And Flows ◽

Transaction Taxes

We use a New Keynesian DSGE model with search frictions on the housing market to evaluate how financing a labor tax reduction by higher property taxation affects the real economy and welfare. Search on the housing market enables us to explicitly model stocks and flows, which is necessary to differentiate between recurrent property taxes (levied on stocks) and property transaction taxes (levied to flows). We find that using recurrent property taxation as financing instrument outperforms other instruments although all policy measures increase aggregate economy-wide welfare. Our simulations suggest that using property transaction taxation as financing instrument is the least favorable measure.

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