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Duration‐dependent transaction tax effects on sellers and their behaviors

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  • Yanjiang Zhang
  • Yong Tu
  • Yongheng Deng

Abstract

We identify three interrelated behavioral outcomes of the duration‐dependent seller's stamp duty (SSD) implemented in the Singaporean private housing market and examine how it reduces market liquidity. An SSD lowers lock‐in home sellers’ opportunity cost of holding their properties through the lock‐in period thresholds. Consequently, their selling prices are higher than non–lock‐in home sellers. An SSD lowers their probability of home sales; the magnitude of this effect depends on the SSD's tax rate and tax rate deduction across a threshold. Moreover, an SSD drives some lock‐in home sellers to lease out the properties at lowerents.

Suggested Citation

  • Yanjiang Zhang & Yong Tu & Yongheng Deng, 2024. "Duration‐dependent transaction tax effects on sellers and their behaviors," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(1), pages 140-183, January.
    • Handle: RePEc:bla:reesec:v:52:y:2024:i:1:p:140-183
    DOI: 10.1111/1540-6229.12441
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