Transaction Costs in Housing Markets
Tinbergen Institute Discussion Paper No. 08-099/3
16 Pages Posted: 18 Oct 2008
Date Written: October 15, 2008
Abstract
According to economic theory, there are no strong reasons to tax (or to subsidise) residential moves, although low levels of taxation may be potentially justified to deal with the presence of externalities and economic stability. This is in contrast to practise in most countries where governments have created strong barriers to moving (transaction taxes, rent control) which induces substantial transaction costs. Likely, the welfare losses due to these government-induced transaction costs are substantial.
Keywords: R21, R23
JEL Classification: Housing market, residential mobility, transaction costs, transaction taxes, rent control
Suggested Citation: Suggested Citation
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