Stepped on by stamp duty: The effect of housing transaction taxes on home purchases and people movement
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This paper quantifies the effect of housing transaction taxes (i.e. ‘stamp duty’) on housing mobility. In 2011, the Queensland Government raised stamp duty for owner occupier purchases by 1% of the average sale price, while stamp duty remained constant in several other Australian states and little changed for Queensland investor purchases. We apply a triple-difference specification using investor purchases as one control layer, and matched control areas from non-Queensland states as another. The tax increase lowers the number of owner-occupier purchases by around 8%. With separate administrative data on Australian’s locations, we find the rate of people movement to decline by a similar amount.
Mr Aaron Wong is a senior research economist at e61 Institute. His research focuses on the intersection of labour and urban economics, using micro data to understand how location shapes the decisions made by Australians on where to live and work. Aaron previously worked at the Reserve Bank of Australia, where he analysed Australia’s housing markets, contributed to economic forecasts and examined financial risk to the RBA’s domestic portfolio. He holds a Bachelor of Economics (Honours) and Bachelor of Commerce from the University of New South Wales where he graduated with First Class Honours and the University Medal in Economics.
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