Citation

Discussion Paper Details

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Title: The Incidence of Transaction Taxes: Evidence from a Stamp Duty Holiday

Author(s): Timothy J. Besley, Neil Meads and Paolo Surico

Publication Date: July 2014

Keyword(s): surplus incidence, surveyor's evaluation and tax holiday

Programme Area(s): Public Economics

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affected by the tax holiday around 8%, most of this effect appears to have reversed rapidly after the policy was withdrawn, suggesting mostly a short-term retiming of transactions.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.

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Bibliographic Reference

Besley, T, Meads, N and Surico, P. 2014. 'The Incidence of Transaction Taxes: Evidence from a Stamp Duty Holiday'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10063