The regional heterogeneous effects of property transactions taxes in England and Wales
This paper analyses the regional heterogeneous effects of property transaction taxes in the residential housing market in England and Wales. I exploit two sources of variation. Firstly, a single tax rate is applied to transactions in some price bands and jumped at some cutoffs (slab system). After a reform in December 2014, successive bands of the purchase price were taxed at increasing rates, and the discrete jumps were replaced by changes in the slope (slice system). Using a combination of administrative and quasi-administrative data, I estimate how different the effects of both systems were in London and out of London. I find that the slab system destroyed property transactions out of London, but not in London. However, the reform to the slice system mitigated this welfare loss. To explore the mechanisms driving this variation across regions, I build a search and matching model of the ownership market that incorporates bunching. Motivated by descriptive evidence, simulations of the model suggest that sellers' search cost and sellers' transaction gains/costs explain the regional heterogeneity in the response to the tax.
Presented at:
- Workshop (scheduled) - Lisbon Urban and Public Economics Workshop (2026)
- Conference - Royal Economic Society (2025)
- Conference - Spanish Public Economics Meeting (2025)
- Conference - Housing Studies Association Conference (2025)
- Conference - Scottish Economic Society Conference (2025)
- Seminar - Centre for Competence in Microeconomic Evaluation (2025)
- Seminar - Pablo de Olavide University (2025)
- Seminar - University of Granada (2025)
- Seminar - University of Malaga (2025)
- Internal Seminar - University of Edinburgh (2024)
- Workshop - Ph.D. Statistics Day at the University of Edinburgh (2023)