How Do Stamp Duties Affect the Housing Market?

  title={How Do Stamp Duties Affect the Housing Market?},
  author={Ian Davidoff and A. Leigh},
  journal={Real Estate eJournal},
  • Ian Davidoff, A. Leigh
  • Published 2013
  • Economics
  • Real Estate eJournal
  • Land transfer taxes are a substantial portion of the cost of moving house in many developed countries. Because stamp duties are endogenous with respect to the house price, we create an instrumental variable that is the stamp duty on a property, based on the starting house price in the relevant postcode and the national house price trend. In a specification with postcode and year fixed effects, this instrument effectively captures policy changes and non�?linearities in the stamp duty schedule… CONTINUE READING
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